Significant Trade Volume Triggers Localbitcoins KYC Requirement

[Goozzi]

Bitcoin users are frantically searching other exchanges today that don’t require Know-Your-Customer (KYC) verification. A post on the Reddit forum /r/bitcoin on April 17 showed a picture that stated a Localbitcoins user’s trade volume was “significant” this past year, and the trader had to verify their identity in order to keep trading.

The picture reads:
Error! Your trade volume has been significant in the last twelve months. Please verify your identity to continue trading.

Localbitcoins does use a verification process but it’s never really been enforced, although some believe more traders will trade with you if you are verified. Much like the rest of the exchanges out there that do require immediate verification, Localbitcoins uses an ID service called ‘Netverify,’ created by a company called Jumio. Basically, the user uploads a picture of both sides of their license or state ID and in a few minutes, the platform reveals if the identification is a legitimate or not.

Source: https://news.bitcoin.com/significant-trade-volume-triggers-localbitcoins-kyc-requirement/

[avikz]

Every business has a good time and a bad time. With this kind of forced verification attempts, the bad time will start for localbitcoins. I am sure a lot of traders will be migrated to paxful after such kind of verification attempts. Even though I didn't get such notification from them because my trade volume with locabitcoins is not very significant, but it's better to be sure than to regret later. I am switching to paxful now and I am glad that paxful is already active in my country with lots of traders.

[Coffee135]

That's why all the government talk about legalization is fake. Governments are slowly taking control of all the turnover of cryptocurrencies. This will occur due to the fact that all users use the exchange for Fiat. As soon as bitcoins are accepted as a currency in online stores another era will begin. Then KYC checks will not be needed.

[Argoo]

I think that traders will go to trade in decentralized exchanges, and centralized ones, and those that will transfer data about their customers to the relevant law enforcement agencies, will fall significantly in the volume of trading. Now there are and will continue to appear decentralized exchanges, which can be registered in countries that are friendly to the crypto currency or in offshore zones. This process will be polished for a long time.

[chaoscoinz]

Bitcoin users are frantically searching other exchanges today that don’t require Know-Your-Customer (KYC) verification. A post on the Reddit forum /r/bitcoin on April 17 showed a picture that stated a Localbitcoins user’s trade volume was “significant” this past year, and the trader had to verify their identity in order to keep trading.

The picture reads:
Error! Your trade volume has been significant in the last twelve months. Please verify your identity to continue trading.

Localbitcoins does use a verification process but it’s never really been enforced, although some believe more traders will trade with you if you are verified. Much like the rest of the exchanges out there that do require immediate verification, Localbitcoins uses an ID service called ‘Netverify,’ created by a company called Jumio. Basically, the user uploads a picture of both sides of their license or state ID and in a few minutes, the platform reveals if the identification is a legitimate or not.

Source: https://news.bitcoin.com/significant-trade-volume-triggers-localbitcoins-kyc-requirement/

Well, the reason being for KYC is because in most places, you need a money transmission license, in order to move large volumes. If you haven't noticed, regulations are being enforced, hard and fast. This is the reason the current price of crypto at the moment has taken a beating. Speculators have been pulling out as of late, cutting ties until the law is clear and concise.
This is the bubble they've spoke of that popped when it hit $20,000 a few months ago. As soon as governments in major territories where crypto is thriving started issuing statements (like mainland China), F.U.D spread and people starting shorting investments, other pulled out completely in a frantic state of panic.

[squatter]

Bitcoin users are frantically searching other exchanges today that don’t require Know-Your-Customer (KYC) verification. A post on the Reddit forum /r/bitcoin on April 17 showed a picture that stated a Localbitcoins user’s trade volume was “significant” this past year, and the trader had to verify their identity in order to keep trading.

I was under the impression that Localbitcoins was enforcing KYC (beyond some unknown thresholds) for some time now. For example, this thread is from January. Maybe they've started enforcing it en masse or lowered the thresholds and that's why news is emerging now.

I imagine Localbitcoins might have some regulators breathing down their neck. This will push some business to Paxful, but eventually regulators will come knocking there, too.

Peer-to-peer fiat/BTC trading is going the way of the dodo, sadly. I've fortunately still got some old contacts that I trade with from time to time, but they've all left LBC in the past few years due to fears of law enforcement.

[Don Pedro Dinero]

Every business has a good time and a bad time. With this kind of forced verification attempts, the bad time will start for localbitcoins. I am sure a lot of traders will be migrated to paxful after such kind of verification attempts. Even though I didn't get such notification from them because my trade volume with locabitcoins is not very significant, but it's better to be sure than to regret later. I am switching to paxful now and I am glad that paxful is already active in my country with lots of traders.

And how long do you think it will take until Paxful requires KYC as well? If most of the volume from Localbitcoins switch to Paxful the same will happen.

[KorakPawon]

of course, because the price of the bitcoin depends on the market and the volume of needs, if it is good then the price will rise, if it is less good price risk will drop, price stability is at stake there. but recently the use of bitcoin is protected by KYC to reduce high crime, because basically bitcoin is not bound so many account hackers to steal bitcoin because the price is quite expensive.

[jseverson]

This is really strange to me. I wonder what prompted this move. Are they simply future proofing, or have they been getting calls from law enforcement agencies? The way I see it, they're only providing a service for two people to be able to deal with each other, so there shouldn't be any need for them to implement KYC themselves, unless they want to protect their users from money launderers/criminals looking to liquidate, maybe? Or is it required of them because they offer an escrow service?

I do hope Localbitcoins come out with a statement of their own. I hope Paxful and the others don't follow in their footsteps though. Don't fix what isn't broken.

[btcdevil]

Ya it is true that localbitcoin exchange have started to ask the customers to fulfill the KYC requirements if not they wont be able to trade and i think even they are asking the low level trading users also as i was also asked to fill the KYC requirement.

[darkangel11]

Ya it is true that localbitcoin exchange have started to ask the customers to fulfill the KYC requirements if not they wont be able to trade and i think even they are asking the low level trading users also as i was also asked to fill the KYC requirement.

But were you asked the way that trader was, meaning that they wouldn't allow you to trade at all? How much were you trading on average, because what you're saying is a bit different from what OP is saying. According to him people with large transactions have been asked to provide IDs, but you're claiming that small time traders are asked to do it as well. Or maybe you aren't a small time trader...

IMO there should be a clear indication of how much you can trade without having to provide identification. Many exchanges are allowing people to trade a certain amount before they are asked to verify and that amount shows in your profile.

[Fatunad]

Every business has a good time and a bad time. With this kind of forced verification attempts, the bad time will start for localbitcoins. I am sure a lot of traders will be migrated to paxful after such kind of verification attempts. Even though I didn't get such notification from them because my trade volume with locabitcoins is not very significant, but it's better to be sure than to regret later. I am switching to paxful now and I am glad that paxful is already active in my country with lots of traders.

This is already somehow anticipated which sooner or later KYC procedures or implementation would happen specially when trading volume would really already create some noise.For now there would really be such transition of traders which they would highly migrate to LB to paxful which i do agree on your point. KYC era will surely go across into various platforms and services for sure.

[squatter]

This is really strange to me. I wonder what prompted this move. Are they simply future proofing, or have they been getting calls from law enforcement agencies?

I guess it doesn't matter. Either they are getting pressure from law enforcement, or they are anticipating it.

The way I see it, they're only providing a service for two people to be able to deal with each other, so there shouldn't be any need for them to implement KYC themselves, unless they want to protect their users from money launderers/criminals looking to liquidate, maybe? Or is it required of them because they offer an escrow service?

I think it would be less of an issue if they were a simple classifieds service. But yeah, they offer an escrow service where they physically hold and release the assets. That could make things precarious if they are construed as facilitating money transfers without KYC procedure in place.

I do hope Localbitcoins come out with a statement of their own. I hope Paxful and the others don't follow in their footsteps though. Don't fix what isn't broken.

They've been enforcing KYC since at least January and I don't think they've announced anything. Chances are they'll keep quiet to prevent an exodus to other platforms.

[KrishaBitcoin]

Bitcoin users are frantically searching other exchanges today that don’t require Know-Your-Customer (KYC) verification. A post on the Reddit forum /r/bitcoin on April 17 showed a picture that stated a Localbitcoins user’s trade volume was “significant” this past year, and the trader had to verify their identity in order to keep trading.

The picture reads:
Error! Your trade volume has been significant in the last twelve months. Please verify your identity to continue trading.

Localbitcoins does use a verification process but it’s never really been enforced, although some believe more traders will trade with you if you are verified. Much like the rest of the exchanges out there that do require immediate verification, Localbitcoins uses an ID service called ‘Netverify,’ created by a company called Jumio. Basically, the user uploads a picture of both sides of their license or state ID and in a few minutes, the platform reveals if the identification is a legitimate or not.

Source: https://news.bitcoin.com/significant-trade-volume-triggers-localbitcoins-kyc-requirement/

Yes it will really trigger because massive conversion from Bitcoin to fiat will be a security alarming specially if its involve a huge amount. Know your costumer (KYC) is much really needed to ensure the safety of this high trade volume to determine if is not connected with money laundering. If these traders are legal people that they have nothing to hide illegally then i think there is no problem regarding of being a KYC compliant. Although a delaying process for a trade but still it will be for their safety as a traders too.

[Rustamm]

Once the states are determined with the legalization of the crypto currency and its taxation, the requirement of identifying the individual when exceeding certain amounts at the auctions of various exchanges will be common. However, it is possible that some countries will not require this from crypto-exchange exchanges located on their territory, and in order to maintain trading volumes, exchanges will be transferred to such countries. This process, I think, will take several more years.

[dmdigitalmarketing]

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