Bitcoin Forum

So I just read BurtW (I think thats his name) post about getting into trouble with homeland security for trading on localbitcoins. Was it something that he did wrong or did he do something he wasn't aware of? Didn't delcare taxes etc.

Is it safe for me who lives in Germany to use the service? Maybe the site is illegal in the states?

If I remember correctly LB halted their service in Germany.

Localbitcoins is sinking.... Traded frequently on it till a year ago, now they block your account under suspicion, even if you have done NOTHING. They're just ridiculous :)

There are many scammers and drug dealers using localbitcoins, so it is extremely sensitive from law enforcement point of view. The site should have implemented AML and KYC measures to reduce the amount of fraud and illegal acitivities, but since there are no law currently require an escrow service to do that (I think it will come sooner or later), it is totally up to the dealer to follow the AML and KYC rule (I guess most of the pro traders on the platform do that)

To be hoenst I been with them for a number of years never had any problem but seeing a lot of down trends with them and volume of trades going though on it or even seeing it being really active like it use to be. As you said few years back it was good. Now well it is a tough battle when their far better places popping up to use and trade with and exchange your coin into fiat. I give it a few more years maybe they will be at the bottom of the list, who knows but time will only tell.

No BurtW did nothing wrong, other than living in an area that has forfeiture laws.
Forfeiture laws allow law enforcement to take any asset because of suspicion, and then you must prove your innocence to get the assets back from them.

They get to keep any assets that you aren't able to reclaim for their own, and spend it on anything they like.

Comedians rightly poke fun at such laws:
https://www.youtube.com/watch?v=3kEpZWGgJks

Actually, our fraud rate is less than 0.5% right now. it's gone down significantly from the start of the year.  And volume wise we're up around 40% from the start of the year.

Really interesting how thats possible, NON have reacted on my trades for the past six months, while that used to be about 3/4 a WEEK! Trade volume up? I highly doubt it. Maybe you're talking about an area in particular, overall the facts speak different sadly....

You can actually see for yourself. Through our API we publish information on volume per currency. A friendly user has used our API to create this site which shows our weekly volume for a few currencies: http://charts.coin.dance/.

I have done handful of trades on LBC too and not all went smooth but the majority were ..
one thing I can bet on is 'they allow scammers and promote them'.

IMHO the "issues" with LBC happen because they try to please the armchair traders by including all those shady payment providers and putting them first development- and visibility-wise. Very little is done for the traders that actually trade "local", i.e. face to face. I would wager a guess that the scam rate on face to face trade is near zero.

Nice status report of volumes however some of them are down but most up. I will continue to use localbitcoins.  open the doors for different types of payment maybe exchanging out from BTC into another coin would be a good feature to have and be allowed to do so with trades from people like sell BTC buy LTC or vise vers and so on.

As others have said it's not available in Germany. Look at Bitcoin.de. It's integrated with certain banks so trades can be nearly instant.

banks ? if you dont care about anonymity or privacy then why are you avoiding coinbase ? it takes some days though..

Coinbase also seems unavailable in Germany: http://btcgeek.com/coinbase-expands-14-countries-leaves-uk-germany/

Alternatively to bitcoin.de (which is person to person) you can look at Kraken. They use the same banking partner as bitcoin.de (Fidor bank).

It seems to be the law in Germany that exchanges only can operate if they have a local banking partner, as explained in this (German) article:
http://www.winheller.com/bankrecht-finanzrecht/bitcointrading/bitcoin-exchange.html


Additionally there is a German section on this forum: https://bitcointalk.org/index.php?board=16.0  There might be more info available there.

correct
essentially bitcoin is a secure site and can be used in every country,, if illegal LB certainly have long blocked by country

If you live in Germany you won't run into the specific problem that I had (US Homeland Security) but you might have issues specific to Germany.

If you are interested you can read all about my case here:

http://www.jmwagner.com/
http://www.burtw.com/

I have done several bitcoin trades with local bitcoin. I bought bitcoin from localbitcoins. I paid money through bank transfer and get the bitcoin later. No problem at all.

Just going on localbitcoins, finding a buyer or seller there, and then meeting with them is not as problematic as setting up an account to buy/sell and then advertising there.  It is the advertising your willingness to buy/sell that makes it look like a business and may require a license.  Just using the localbitcoins service to locate a buyer/seller who has an ad on the site does not make you look like a business.

I wonder how risky is that in other countries where the laws are not that strict. tbh you and a couple of other cases are the only ons I heard of having problems. Did lbtc ever result into people having problems in other countries ?

There were five Bitcoiners arrested the same timeframe as I was in "operation avalanche", so there have been at least five cases in Colorado.  The feds also did the same kind of operation in Florida but I am not sure of the total number arrested.

I am not aware of any cases outside the US, but I do not keep up on that.

there is laws for how much money you transfer that is the problem..
under the limit your fine over? you better call your accountant lol

some countries and some amounts dont have that problem its just a security and anonimacy thing into europe its regular to do like 200€ and dont pay taxes

In the United States FinCEN has given guidance that whether an entity trading Bitcoins is a business or not is a matter of "fact and circumstances".

This means that whether my trading of Bitcoins on Localbitcoins.com was a business is not a matter of regulation (over a specific amount, etc.) but must be decided by the decider of "fact and circumstance".

What this means is that the question of whether it was a business or not must be decided by a jury trial.

A jury trial for the criminal case against me plus the additional civil trials of all the seized property was going to cost me an additional $75,000 to $150,000.  The government offered to drop the criminal case against me and all the civil cases against all the seized items for a "donation" of $80,000 to their civil asset forfeiture slush fund.  Since that was cheaper and was a guaranteed outcome (case against me dropped, get all the seized property back) we decided to go with that.

But the bottom line is that since the case never went to trial and the jury did not decide if what I was doing was a business or not this matter was left undecided.

This means that they can still arrest you for doing any amount of trades using localbitcoins.com and claim it is a business.  There are no regulations or guidance in place as to what constitutes a business and what does not.

I paid income tax on every Satoshi of profit I made.  My case was never a tax issue.  The question was whether my trading on localbitcoins.com constituted a business or not.  It it was not a business and I was trading for my own account then I did not need a license.  If it was a business then I would need a license.

What the government should have done and what they would have done if they were not blinded by their delusion of a direct huge windfall asset forfeiture to their department, was send me a cease and desist letter and then we could have hashed this out like civilized human beings.  Instead, they spent millions of dollars, arrested me, threw me in solitary confinement, treated me as a terrorist under the patriot act, and held a five year sentence over my head in order to unconstitutionally shake me down to fill their coffers by outright extortion.

Anyone knows exactly why LBC halted service in Germany while continuing to operate elsewhere in the EU?

Licensing uncertainty
http://www.coindesk.com/localbitcoins-exploring-options-service-halt-germany/

Soon we will need underground trading platform instead of Localbitcoins. Government officials have become increasingly concerned about these unregulated financial systems, and the US is starting to apply money laundering regulations to cyber currencies. I wouldn't be surprised that these current and future regulations kill services like Localbitcoins.

U shouldn't get into any trouble using localbitcoin as long you dont overdo it (like several 10k's of Euros).
Bitcoins are no way illegal in germany.. there are even some BTC ATM's spread in germany.
Even tho they have an "Outputmax" per day until its registered as an official exchange service.

I never use local bitcoin any more, they place account under suspect and also very high fees for those selling on there

Been dealing with localbitcoins for a while now ! They were totally secure and provided nice escrow services for every translation and they still do .However I stopped trading at local bitcoins because of extreme low rates for fiat transfers.Some cheap assholes literally trade for dirt cheap prices which is always a lose lose situation for us sellers .Also people on this forum provide verification services on LB which makes scammers more resistant .

I never use their escrow, I just meet up offline and exchange coins there :)

If you're in the US, sometimes even the state you're in can make a difference. All in all, the problems most people run into are regional.