Bitcoin Forum

I was on LocalBitcoins this afternoon and noticed Cash-in-Person trades appear to be removed. I am not able to find anything about this on their FAQ nor their Twitter, or their blog.

Does anyone know when this was effective, or their rational behind this?

I cannot image any legal rationale behind removing these ads, at least in the US, as they are only posting content by their own users.

I know there have been crackdowns by the US government regarding money laundering, and it wouldn't surprise me one bit if they are afraid of eventual consequences on them and are just getting out in front of it. My current analysis of the legality is that it is highly illegal to sell bitcoins as a business in the US, and anyone attempting to do so should be very cautious.

In some cases, selling bitcoins for cash may be illegal in the US, but this wouldn’t make hosting ads for this illegal due to safe harbor laws. There are some ways selling bitcoins for cash would not break the law but I don’t want to be giving anyone anything that could be construed as blanket legal advice. You can also obtain various licenses and maintain specific records and be selling bitcoins for cash in large volumes completely legally. 

wow, it's the end of an era. localbitcoins p2p cash trades were the bomb a few years ago. i can't say specifically what is triggering this, but it seems like localbitcoins is just getting increasingly rigid with the AML/KYC stuff.

p2p cash trades were a way to avoid the escrow system and therefore KYC so i'm not surprised they've been removed. sucks though. :-\


not true. you need to register as an MSB and carefully comply with AML/KYC and currency reporting regulations though.

I agree, with the proper paperwork it would be legal, but it would get very expensive very quickly for a single man operation. Back when  I sold, and over the course of 3 years sold more than 6 million dollars worth, it would have just been worth it to go down that route. Unfortunately, my supple of coins dried up at that point and I could not continue, but the point is that a very small group of people this would work for. I would imagine LBC is just getting out ahead and not wanting to get into legal trouble.

I am fairly certain that local bitcoins has safe harbor in the US so long as they are not considered a publisher under US law. They could give resources to traders to help them follow and comply with the law.

I don’t think the “online” traders will see things much differently in terms of the law.

I like trading face to face because my privacy is increased as there isn’t a paper trail. I am doing everything by the book so to speak including paying all my taxes, but I don’t like a lot of prying eyes knowing my business.

RIP Localbitcoins.
I do not know why members are trying to point to the United States, but this platform has responded to EU pressure. They will impose more restrictions this year and add new verification layers of KYC/AML.
I found this list for those who are looking for alt ----> https://www.reddit.com/r/Bitcoin/comments/b2wj6k/p2p_exchanges_eg_localbitcoins_bisq_hodlhodl/

thanks, seems like a pretty comprehensive list. but no indication of where the best volume/liquidity is. bisq offers still looking pretty thin. where are most people p2p trading now that paxful has also implemented KYC?

Just a few weeks ago they also removed gift card transactions, so it's probably a series of moves due to regulatory pressure to try and stay in business while offering semi-anonymous accounts to users.

I can confirm that this is most likely a global thing, and not just limited to the US, since I can't see any cash in person ads in AU either.

I've already seen a lot of the traders I dealt with in the past move their operations (especially those who deal with GCs constantly) to paxful and other platforms. Though, I think that LBC still offers the most liquidity and options at this stage.

Nice catch. First the gift cards and now face to face meets. Strange thing is I didn't get any notification of this at all on either methods being removed.

Tell you what though, you can still put in a message about face to face trades, which is what I can see right now on some traders. Guess LBC needs to properly update its terms if they want to outlaw cash in person.

I'm not sure if moving to paxful will solve much in the long term. It seems that they're also keen on bending to the authorities. (As they've already done by forcing KYC on sellers after 1000$, etc.)
Perhaps a real decentralized platform could take it's place, although with the amount of scams (paypal chargeback, fake/carded giftcards on paxful) i wonder how much animo there really is.

I wonder what Localbitcoins themselves make of all this. I'm sure they're not adding it for fun. At some point there'll be properly viable decentralised P2P options and then their business fades away. I presume they've made vast amounts of money so it won't really matter.

The way they're going they're going to wind up being the worst of both worlds.

where can you go for in-person cash trades now? that's what i want to know. is there any service left (that people actually use) where you can set up a trade for cold hard cash?

paxful literally only has 6 listings for in-person USD cash trades and nothing in my state. is that really as good as it gets now? :'(

Not so surprising when you see LBC removed the gift cards option some weeks ago. Anything that isn't traceable won't last long and going to be removed soon or later from the platform. And it will be a general trend for all these websites type, LBC won't be the only one.
@figmentofmyass As for an alternative, Paxful is the only one I'm aware of. All others have a so low users base.

I understand why they would not want gift cards traded. Gift card transaction have a very high fraud rate, and would be very hard to mediate any dispute between two traders. A dispute in which LocalBitcoins sides with the person who was scamming could result in the person who got scammed to not use LocalBitcoins even for trades they can easily mediate.

It is very difficult to gauge how much you can trust someone in a truly decentralized platform. A decentralized platform would make it too easy to create many fake trades and fake vouches. I also don't think it would be possible to mediate any trade disputes.

Quite a disappointment if it's not a mistake on their part. In-person cash trades were the reason to use localbitcoins over exchanges, for security and privacy reasons.

Face-to-face cash trades in a safe location are also the safest way of exchanging BTC for cash, there's no worrying that the person sending fiat money via a bank transfer, PP, whatever has hacked someone's account to make the transfer.

Definitely disappointing.

Though, I doubt that this decision was something that was within their control - most likely they are concerned about the pressures that the regulatory bodies placing on them to remove all untraceable transactions with cash. And given the fact that Localbitcoins has expanded so much in terms of their trading volume that there is no escaping from the eyes of regulatory bodies.

All the alternatives that still work with cash in person without any KYC will probably eventually encounter this issue as well, given that they have  noticeable volume. That's all people can go with at the moment if they still want cash in person trades right now, though.

I am not sure what you mean by, "safe harbor"? Could you elaborate or point to what law your talking about?

that's super depressing. the closest listing is several hundred miles away from me.

is there just no interest in p2p cash trading anymore? i'm hoping now that localbitcoins has axed the option that some traders will head to paxful. soon enough, paxful will probably remove the option too.

Very disappointing indeed.

I was referring to section 230 of the Communications Decency Act (https://www.law.cornell.edu/uscode/text/47/230), but after reviewing the law, it only provides protection against civil cases, and does not affect criminal cases. I don't believe any AML related law would apply to LocalBitcoins as a website, at least not in the US; there are AML related laws that do apply to their users.

No dude, people are mainly interested to get money on their bank account. Add to that the fact that most people hold, trade or place a bet on an ICO... Me too I wish more people buy/sell with people face to face, no kyc/aml/taxes...
I was thinking if websites like Backpage could become an alternative for people who want to trade in person.

Wow, this is really sad. But I can't really say it was unexpected. LBC recently started implementing KYC and in some cases (like mine) they were even making some very intrusive questions about source of funds and such. I had my crypto locked in there for over 2 weeks until it finally got released. Needless to say I stopped using LBC right after that happened (I did do some face to face trades without using the escrow with a few trusted members though, until now they were allowed to publish their phone # or Telegram contact so the deal could be closed over there).

Can you post what questions they asked you?

From what you're saying I don't think we'll be getting in-person cash trades back. They're acting like a regular exchange now.

I opened a thread at the time, here it is:

https://bitcointalk.org/index.php?topic=4662474.0

This is the reply they sent me after I opened a ticket:

https://i.postimg.cc/Y92gzCSc/Captura-de-pantalla-2019-06-04-a-las-17-19-01.png

After I complied with these requests I got this one:

https://i.postimg.cc/XYjb3rQB/Captura-de-pantalla-2019-06-04-a-las-17-20-37.png

And finally after sending a proof of funds they unlocked the coins. I was lucky enough that I had received the BTC for professional services, but had I got them from mining activities, gambling or simply from a friend I would have had no chance of proving anything.

Not the end because you know, there will be always different and difficult ways because there is demand and supply, this both works in synergy against difficulties which are set baffle them.
Btw if anyone knows, were there reports of some crime/murders and robbing when trading bitcoin cash-in-person? Will be interesting to know if this was the reason of removing this option.

I knew they sometimes blocked accounts they suspected of being hacked/hijacked, but this kind of intrusiveness, even before the relevant EU directive has come into law, is something I wouldn't have suspected them of engaging in.


This is the reason: https://twitter.com/LocalBitcoins/status/1135872083962081281

That's horrible. LocalBitcoins seems equivalent to Bitstamp now regarding AML/KYC -- and that says something. I don't trust these European companies anymore. I'm going to advise people against ever using LocalBitcoins because like you said, in many cases people won't be able to provide the necessary proof in these cases.

This is suicide.

I haven't been using LocalBitcoins much, but only to make Cash-in-person trades. If it's no longer possible, I won't use LocalBitcoins any more.

I believe Hodl Hodl is their best successor, but they have very, very few trades... Anyone suggests another service? I live in Europe and my interest is limited to Cash-in-person trades.

there was a pretty comprehensive list mentioned earlier in the thread: https://www.reddit.com/r/Bitcoin/comments/b2wj6k/p2p_exchanges_eg_localbitcoins_bisq_hodlhodl/

nothing compares to localbitcoins though, not even close. the next biggest service offering in-person cash listings seems to be paxful. im in the USA and there's less than 10 listings (to sell for cash in person) across the entire country! a few more have popped since localbitcoins removed the option, but still......

What the hell, how do you know that they wouldn't send them back if you'd gotten them from gambling or mining?
That seems a little bit worrisome, that they would keep the coins in those cases.

Damn, reason enough for me to not use LBC anymore.

Why so? I believe you did not use the localbitcoins.com itseems.

They have signed with the european law agreement last itself and then to stay as a gentle trader on LBC you need to show the KYC details to them. I was using LBC around 2 years they are very much secured.

Bitcoin.com launched its own local.bitcoin.com. I thought it was a joke at first, but not at all. I have visited the offers there and I can say that there are not many either, maybe because it is the beginning, but the site really lacks functionality too. Too simple UI, and if I'm correct, only Btrash can be used

@figmentofmyass
It's a matter of time before the same change appears on Paxful

@eternalgloom
Some services (wallets/exchanges mainly) don't allow their users to receive bitcoin from gambling/casino/poker/etc websites. In the example, Coinbase.

I thought the same thing at first, but apparently this wasn't done in response to EU or US regulations. Localbitcoins said the removal of cash trades was done to comply with new Finnish regulations (https://cointelegraph.com/news/localbitcoins-confirms-removal-of-local-cash-trades). They operate from Finland.

Paxful appears to operate from the US, so I don't see them removing cash trades based on this.

New Finnish regulations were enacted to comply with 5AMLD:

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32018L0843
https://complyadvantage.com/blog/5mld-fifth-anti-money-laundering-directive/

Finland is in Europe and all European countries obey to Europe regulations/directives and create their laws accordingly. Each law may be different since it's adapted to the country but the goal is the same: following EU directives, otherwise, the country can receive a fine from Brussels.

If Paxful is in The US. it may be prohibited to operate with Europe and therefore refuse or block certain functions to European citizens. In much the same way that some trading platforms prohibit access for American citizens (and sometimes just a few states in the US)

It sounds like these services should consider segregating their EU customers from everyone else. Run a second platform and prohibit EU customers from the main one.

It's either that, or continue degrading services for everyone across the globe. :-\

I wish they'd just move to a friendlier jurisdiction. What's their breaking point?

Yes, I've seen that list, just wanted to know what others were thinking.

I've looked at Paxful, and when it comes to cash in person offers, it has only 4 of them in the whole of Europe... And they're not cheap!

I guess there's an opportunity. If I were sedentary living in a big city, I would become a trader, there are customers waiting.

It could be that in person cash trades are not very profitable. The cost and difficulty of mediating disputes for in person trades is probably much higher than online trades. All the scams involving in person cash trades doesn't do their reputation any good either.

I would say it's the other way around, online someone can easily send you money from a hacked bank/neteller/pp/etc. account, or claim they got 'hacked', chargeback, etc. With cash things are a lot simpler, count the money, release the coins, bye.

LBC themselves admitted they had to remove local cash ads due to not being able to remain compliant with new regulations: https://twitter.com/LocalBitcoins/status/1135872083962081281

The reason they do not move to another jurisdiction may be the profitability of online trades vs. face to face cash trades.

The advent of KYC requirements on LocalBitcoins  may reduce instances of claims of hacked bank accounts because the identity associated with both accounts will either match, or if they don't match, LocalBitcoins can make a Law Enforcement referral when a particular buyer is using hacked accounts to pay for coin and his identity is known.

KYC will also prevent scammers and fraudsters from creating multiple LocalBitcoins accounts to use hacked accounts to buy coins multiple times.

It wouldn't surpise me if LBC goes out of business at a later point in the future. I'm strongly of believe that what we have seen so far in terms of regulations, is just a glimpse of what we can expect later on. It's not entirely bad because this will fuel 'underground' services to pop up that are way harder to take down and people will have more freedom to transact as they please.

I also prefer to see multiple smaller sites than a big one like LCB that's easy to force your will upon as government. It's a shitshow really.

You've got to ask yourself why you should use LBC instead of a big exchange like Binance or Kraken...
I don't see any reason to choose LBC.

It's all country dependent.

Up until recently in the UK LBC was the best option because whatever exchanges there were in the UK couldn't bank there. You had to wire money to Estonia or Poland which took several days. LBC took minutes.

That's changed now with Coinbase getting local banking, or it would've if Coinbase hadn't put a five day hold on deposits now so LBC is still the quickest option.

There'll be plenty of other countries with no exchange at all or ones with books so thin you may as well stick with LBC.

Without cash trades, not many reasons. There is still the possibility of using other means of payment for people who don't have a bank account (as is the case on many 3rd world countries), or if they are in a country or have a bank that bans crypto transactions.

Privacy? To get better rates than on an exchange if you decide to post your own ads?

If you must pay by bank transfer, there's no privacy...
So better rates? I don't think so. The big exchanges are good at this.

So I guess everything will depend on the user's country, but I don't see much of a future for LBC in the EU.

Until cash trades were removed of course. Right now, there's no advantage. It's even worse than using an exchange where you go through KYC only once (ideally). On LBC whoever sends fiat money has to do some sort of KYC with every party they do business with, because the risk is too high someone uses a stolen/hijacked bank credentials to send money and disappears with BTC.

Still other payment options available right?

As long as we are using fiat money there is no privacy here,we can be tracked through many things not only through banks transactions.

This was the only reason I stayed on LBC to be honest. I started out needing LBC because I lived all around and most placed I was at simply couldn't be served by exchanges (OR, exchanges would refuse to serve me because I wasn't staying put).

I'm settled now more or less but I actually still find good rates as a seller on LBC/Bisq. And that's a huge plus for me really. People like paying fees? I still get a warm fuzzy feeling every time I snatch just $100 more on LBC than I would have elsewhere.

Since I have created this thread, I have noticed many posts on r/btc promoting local.bitcoin.com, a website that allows people to buy and sell bitcoin cash in ways similar to LocalBitcoins, including in person cash trades.

I am not sure how I feel about this. I am not especially interested in trading my bitcoin to or from bitcoin cash every time I want to trade for cash. I think this is a fairly new service as most traders have nearly zero trades. The number of traders in my area is much less than on LocalBitcoins, and their prices compared to market prices are nowhere near as competitive.

I think Rodger Ver is taking advantage of the LocalBitcoins situation.

this is a dead end. there will never be many traders for bcash. it's just a little used altcoin. unlike bitcoin, it's p2p and OTC markets are basically nonexistent. indeed, i think roger is just capitalizing on the localbitcoins situation to pump his shitcoin.

Of course, this Roger Ver is taking advantage of the situation. He created the site the same week in hurry with a subdomain and an ugly user interface, looking like a website with a 2000' design, empty with a dozen of offers, and of course all newbies with no trade records.

If he wanted to make it in a serious way he would have created a proper TLD, with a custom script or at least something with a lot of more features than currently, and a proper theme. Even me I can do a lot better with a Wordpress, a free theme and free plugins.

Edit: I see they improved a little the homepage since last week, but still.

Not just that. I've been getting spam from Bitcoin.com (I don't even actually ever recall signing up for anything, but this must have been from my idiot days in 2016 signing up to stupid newsletters) telling me all kinds of bullshit about millions of Bitcoin.com wallet downloads, and then now supposedly all these new records of volume on P2P local.bitcoin.com -- so much irony in how BCH wants to get away from Bitcoin and yet insists on ripping off every known brand and thing ever associated with Bitcoin. I'm actually even just keeping all the spam out of curiosity.

He's just been doing his best to get people to use BCH... sending $5 to everyone at conferences he attends, and then telling them see, I can't do this because it takes $3 to send $5 BTC.

Actual P2P sellers on the actual platforms with actual volumes, they are so not doing BCH.

For SEO purposes I think it's better to use subdomain of a popular domain than registering and ranking a new domain from scratch. It seems to be working because unfortunately most BTC-based P2P platforms have even less activity than local.bitcoin.com.

This method is so 2006' It doesn't work like that nowadays. It's like people who say .com domain names rank better in SERP compared to .info, .net, etc ... Maybe local.bitcoin.com has more traffic than others but without access to servers stats, it's something difficult to check. Sure there are websites like Alexa Rank, etc, which at a point can be simulated/faked easily, but they don't provide accurate data. (yes it can be used to get an idea). Also need to consider traffic coming from SERP and traffic coming from rogerver fans base


Edit: I counted the offers quickly and there are about 110.  :D

Yes, probably a sizeable part of visitors' are Roger Ver's fans seeing how many subscribers /r/btc has which Roger Ver de facto owns (2.6k online, 256k subscribed), but the domain bitcoin.com is still very highly ranked, when I google/startpage 'buy bitcoin' in incognito bitcoin.com is the first result.