I buy from a local trader I found on LBC, he lives pretty close to my house and so far I haven't had any trouble with this guy, the first couple of times I was really cautious and would tell him to meet at a local cafe and would wait till the transaction had atleast 1 confirmation but now he trusts me and I trust him so when I call him and tell him I need this much BTC, I usually buy worth $50-$100 depending on the requirement and he sends it right over and then I walk to his house or the meeting point and give him the money.
This is perfect, and is the ideal situation
theoretically.
But if he still advertises and does a "lot" of trading through localbitcoins
to the general public then beware. If he is arrested they can and probably will take over his localbitcoins account and use if for their own nefarious ends. In my case I refused all plea deals until they dropped the charges because I was able to cash in my retirement accounts and was able to take out a second mortgage on my home in order to hire a great attorney. Those who end up with a public defender will probably end up with a plea to a lesser charge and some amount of cooperation in order to avoid jail. Depending on his lawyer and how his case goes he may have to fork over all his trading partners as part of his cooperation for the plea deal.
At the current time I believe that as long as you are not doing anything illegal with your Bitcoins you probably will not get into any trouble for going to localbitcoins, finding a buyer or seller, and then meeting with them to sell or buy Bitcoins.
But then again I used to believe that I would not get into any trouble for advertising on localbitcoins.
What I was arrested for was "operating a money transmittal
business without a license", a Federal felony with a maximum 5 years in prison and a $250,000 fine. The entire case boiled down to one question: was what I did using localbitcoins a business or was it trading for my own account? So it is those that advertise and do lots of trades with the general public on localbitcoins that need to be concerned, generally not those that use the service to find traders for legal purposes.
But, as you know, I was wrong before.