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Author Topic: Localbitcoins now requires identification  (Read 238 times)
timerland
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May 08, 2018, 11:01:23 AM
 #21

I haven't gotten any sort of notifications yet, probably because of the fact that my trade volume is still too low for them to consider my account worthwhile to suspend. It seems to have started to happen gradually, over the past few weeks as more and more accounts have been placed into restriction.

The only reason I use LBC right now is because of the fact that it doesn't require identification. If I'm forced into giving away my personal details, I'm definitely going to find somewhere else to trade.

No idea, but I didn't even trade that much over the past 12 months. I believe that my trading volume fell under the 2-5 BTC category, and I'd say that half of it incurred while BTC was still relatively cheap back in the first half of 2017.

I don't think that's that significant by any means, but I doubt that LBC wanted to do this either. Obviously doesn't make sense for them to do this voluntarily, and there had to be some sort of regulatory pressure be put on them.

That's what I was thinking. It makes me wonder if this has been applied everywhere or just in some countries where that pressure is coming from.


It could definitely be possible. The amount of info regarding these new rules released by LBC is next to none (or at least I haven't been looking in the right places). Perhaps it's only a region thing, but everyone seemed to have gotten warnings that had significant trading volume, if not a ban (who is not already verified).

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May 08, 2018, 11:08:03 AM
 #22

The only reason I use LBC right now is because of the fact that it doesn't require identification. If I'm forced into giving away my personal details, I'm definitely going to find somewhere else to trade.

I understand why people don't what to verify, but for my use it doesn't really matter. I only use it to sell small amounts and as I'm using direct payment to my bank I have to give the buyer my name anyway. For larger amounts, I'd always use another exchange with better rates anyway. I guess it depends on what country you are in but for me, other exchanges means paying international wire fees and paying the spread on the currency conversion.

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May 08, 2018, 12:42:26 PM
 #23

The only reason I use LBC right now is because of the fact that it doesn't require identification. If I'm forced into giving away my personal details, I'm definitely going to find somewhere else to trade.

I understand why people don't what to verify, but for my use it doesn't really matter. I only use it to sell small amounts and as I'm using direct payment to my bank I have to give the buyer my name anyway. For larger amounts, I'd always use another exchange with better rates anyway. I guess it depends on what country you are in but for me, other exchanges means paying international wire fees and paying the spread on the currency conversion.

LBC is better to sell our bitcoins when the amount is small and I am also having no problem with providing my personal details,I did few times though.Some of the traders asked me to send the picture of an ID with picture in it and also they asking real name sync with LBC name to continue to trade but not all are asking the verification it depends upon the traders.

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May 08, 2018, 09:37:01 PM
 #24

The only reason I use LBC right now is because of the fact that it doesn't require identification. If I'm forced into giving away my personal details, I'm definitely going to find somewhere else to trade.

I understand why people don't what to verify, but for my use it doesn't really matter. I only use it to sell small amounts and as I'm using direct payment to my bank I have to give the buyer my name anyway. For larger amounts, I'd always use another exchange with better rates anyway. I guess it depends on what country you are in but for me, other exchanges means paying international wire fees and paying the spread on the currency conversion.


Right. But the thing is that not everyone is willing to provide their ID regardless of the amount, and they'd rather stay anonymous. Localbitcoins even used to allow you to put out advertisements on their platform without ID, which is no longer possible. People who wanted to stay anonymous could even get above market price for their coins this way, and now, that is gone.

Also, I don't think that they have released enough information on when you're going to be asked to provide ID. Like what is "significant trade volume" anyways? At least release a precise schedule of at how much volume you'll be asked to provide ID.

All in all, this probably won't affect most established traders anyways, but it's a hassle if you don't want to give out your personal info and you want to trade actively. Also shows that regulations are tightening up on crypto everywhere.

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May 09, 2018, 04:40:16 AM
 #25

The only reason I use LBC right now is because of the fact that it doesn't require identification. If I'm forced into giving away my personal details, I'm definitely going to find somewhere else to trade.

I understand why people don't what to verify, but for my use it doesn't really matter. I only use it to sell small amounts and as I'm using direct payment to my bank I have to give the buyer my name anyway. For larger amounts, I'd always use another exchange with better rates anyway. I guess it depends on what country you are in but for me, other exchanges means paying international wire fees and paying the spread on the currency conversion.


Right. But the thing is that not everyone is willing to provide their ID regardless of the amount, and they'd rather stay anonymous. Localbitcoins even used to allow you to put out advertisements on their platform without ID, which is no longer possible. People who wanted to stay anonymous could even get above market price for their coins this way, and now, that is gone.

Also, I don't think that they have released enough information on when you're going to be asked to provide ID. Like what is "significant trade volume" anyways? At least release a precise schedule of at how much volume you'll be asked to provide ID.

All in all, this probably won't affect most established traders anyways, but it's a hassle if you don't want to give out your personal info and you want to trade actively. Also shows that regulations are tightening up on crypto everywhere.
For the people who think they are anonymous in this world need to know that they are watched by some eyes even if they have personal infos carefully,we all have smartphones now a days and all our information are gathered by the mobile company and which are selling to the advertisement platforms,and all our informations in the social medias are also sold to the most of the companies who will target us with our desired product by someways like if I am an crypto related person so I will get lot of ads and products related to the ICO will come to my mobile through many ways.
SO don't hesitate to provide your information for a good cause which can earn you some money. Smiley

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May 09, 2018, 10:21:50 AM
 #26

No idea, but I didn't even trade that much over the past 12 months. I believe that my trading volume fell under the 2-5 BTC category, and I'd say that half of it incurred while BTC was still relatively cheap back in the first half of 2017.

I don't think that's that significant by any means, but I doubt that LBC wanted to do this either. Obviously doesn't make sense for them to do this voluntarily, and there had to be some sort of regulatory pressure be put on them.

That's what I was thinking. It makes me wonder if this has been applied everywhere or just in some countries where that pressure is coming from.


That would be interesting to see, however I'm pretty sure that it's worldwide.

I understand why people don't what to verify, but for my use it doesn't really matter. I only use it to sell small amounts and as I'm using direct payment to my bank I have to give the buyer my name anyway. For larger amounts, I'd always use another exchange with better rates anyway. I guess it depends on what country you are in but for me, other exchanges means paying international wire fees and paying the spread on the currency conversion.


It'll definitely take away from their customer base for sure. However, you're right. Most people will remain unaffected by this change. Though if it was truly due to regulatory pressure from governments that Localbitcoins is being forced to do this, then is it going to in the future force identification upon all users, not just the high volume ones?

That would make sense considering the direction they're trying to go in at the moment.

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May 09, 2018, 12:49:47 PM
 #27

This is not the surprise. Regulation pressure especialy in the KYC part as well as anti-money laundering and terorrism financing is geting stonger and they are actualy forcedto obey such regulations in order to keep their business and to run it legitimately. But this also represents certain level of protection for users, despite the lower level of anonimity.

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May 09, 2018, 01:10:36 PM
 #28

This is not the surprise. Regulation pressure especialy in the KYC part as well as anti-money laundering and terorrism financing is geting stonger and they are actualy forcedto obey such regulations in order to keep their business and to run it legitimately. But this also represents certain level of protection for users, despite the lower level of anonimity.
Yes,so it is good for the people who are earning money in legitimate ways and harder for the people who do it in wrong way.So I am free to provide any details reqired to continue to trade because I am not a whale or a millionaire. Smiley

But who is imposong these kind of restrictions to that site?their governments or the owner itself want the money laundering to be stopped. Cheesy

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May 10, 2018, 01:08:15 AM
 #29

This is not the surprise. Regulation pressure especialy in the KYC part as well as anti-money laundering and terorrism financing is geting stonger and they are actualy forcedto obey such regulations in order to keep their business and to run it legitimately. But this also represents certain level of protection for users, despite the lower level of anonimity.

Times has really changed and everyone's eyes is on crypto. I haven't imagine and never thought the Localbitcoins will also be targeted by regulators, unfortunately the worst scenario has happened and we can't do anything by to comply and be fully KYC compliant before you can do personal trades.

Well starting this 2018 crypto has been put into their radar specially when the price goes almost $20K and now governments are putting pressure on anything that involves crypto. I just don't like government saying that they are doing it to curb out scam, I'm sure that they want to tax us and have a piece of everything.

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May 10, 2018, 09:14:17 AM
 #30

This is not the surprise. Regulation pressure especialy in the KYC part as well as anti-money laundering and terorrism financing is geting stonger and they are actualy forcedto obey such regulations in order to keep their business and to run it legitimately. But this also represents certain level of protection for users, despite the lower level of anonimity.

It's definitely not the surprise, but the surprise is how quickly they switched from "recommending" people with higher trade volumes to verify their ID, to actually requiring them to present ID before they can resume trading. That was surprising to me, I would have expected that process to take much longer than it actually did.

Also, it seems like that although I only got the ban a few days ago, people have been getting it as early as a month ago. Makes me wonder if this is actually a universal move across the entire platform.

All advertisers had to verify themselves before this anyways, and also since Localbitcoins was already protected by escrow (that's how it works), as well as the fact that LBC accounts will still be traded on the underground markets after this ban, I don't see how it really protects the users any more than it had previously.

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May 10, 2018, 10:02:24 AM
 #31

Localbitcoins has been updated their terms and privacy policy. Here is a short list of significant change:
1. One user 1 Account. (Must be at least 16 years old)
2. Need Identity verification (The process is quite simple and fast)
3. Strict rules for account suspension.

Check out details changes here https://localbitcoins.com/gdpr

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May 10, 2018, 10:11:16 AM
 #32

2. Need Identity verification (The process is quite simple and fast)

They still use the phrase 'may be required'.

Quote
Identity Verification
In order to ensure LocalBitcoins remains a safe platform for all of our customers we may require you to verify your identity to access part of the services we offer. Identity verification may be required when you create advertisements, pass certain trade volume limits, during trade disputes, fraud investigations, and to ensure account ownership. As part of our ID verification process we require you to provide us with your full name as well as documents and photographs that verify your identity.

In certain situations we may require enhanced identity verification. This may include requirements to verify details or sources of funds regarding payments you have made or received during trades on LocalBitcoins as well as bitcoin transactions that you’ve sent or received from your LocalBitcoins account.

ID verified accounts have a clear owner which makes it easy to return access to you if you lose all access to your account. It is very hard or impossible to return access to accounts that are unverified, even if you know your username, as it is difficult to identify the original account owner.

This still sort of indicates it isn't being done universally across all customers and/or locations. Paragraph 2 is a bit more disturbing.


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May 10, 2018, 10:39:58 AM
 #33

Quote from: TheQuin
In certain situations we may require enhanced identity verification. This may include requirements to verify details or sources of funds regarding payments you have made or received during trades on LocalBitcoins as well as bitcoin transactions that you’ve sent or received from your LocalBitcoins account.

Absolutely, that is very, very disturbing.

This means regardless of if you are unverified or verified, there is still the possibility that localbitcoins will ask you to provide proof for the fund sources, and that is a complete nightmare to have to go through as a AML measure. Just look at the amount of people currently getting their funds held up by HitBTC right at this moment, being asked for every detail of their source of funds.

I don't know if this clause was always there, or was only recently added. But the fact that the ID verification measures are tightening suggests that it could soon become much worse than what it is right now. Because this clause basically says that we can hold your funds, as well as you ban you from trading.

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May 10, 2018, 10:49:14 AM
 #34

I don't know if this clause was always there, or was only recently added. But the fact that the ID verification measures are tightening suggests that it could soon become much worse than what it is right now. Because this clause basically says that we can hold your funds, as well as you ban you from trading.

I've had my account since 2013 which was probably the last time I read the ToS until I got that email yesterday. So I've got no idea if that's new or not either.

I never hold much coin there anyway, but that certainly doesn't encourage me to start doing so.

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May 10, 2018, 11:19:51 AM
 #35

I don't know if this clause was always there, or was only recently added. But the fact that the ID verification measures are tightening suggests that it could soon become much worse than what it is right now. Because this clause basically says that we can hold your funds, as well as you ban you from trading.

I've had my account since 2013 which was probably the last time I read the ToS until I got that email yesterday. So I've got no idea if that's new or not either.

I never hold much coin there anyway, but that certainly doesn't encourage me to start doing so.


Right.

But yeah, I agree. If there is such hidden clause that is completely vague with no definitions of when this clause will ever be applicable, and the fact that your account balance can be frozen at any given time just based on baseless assumptions without proof, and as a result you having to go through a sophisticated verification process, even if you are already verified, then holding big amounts of coins on there is dumb.

Whether or not this is a newly added clause, hopefully traders, specifically traders with large volume realize that there is this risk involved in storing large amounts on LBC, and LBC has demonstrated that they are tightening the rules, which further increase risks of a suspended/frozen account.

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May 10, 2018, 10:04:25 PM
 #36

Whether or not this is a newly added clause, hopefully traders, specifically traders with large volume realize that there is this risk involved in storing large amounts on LBC, and LBC has demonstrated that they are tightening the rules, which further increase risks of a suspended/frozen account.
This is really bad. LBC is one of the very best platforms for trading,and the risk involved is comparatively lesser than other trading platforms because of the presence of an online escrow.
I don't see why verifying is a problem here,as it is you are already revealing your name,bank account details etc for every trade. Only LBC's staff will be able to look through your details(its not good but it is not that bad either for such to happen). If you're willing to trade more than atleast 1BTC,you might as well verify your account right from the beginning.

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May 11, 2018, 06:58:26 AM
 #37

Does it consider affiliate profits too?
I made an account there and didn't pass the KYC yet but I got bunch of referrals there  , Now I need to pass kyc to withdraw my profits from my referrals?
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May 11, 2018, 08:47:54 AM
 #38

Does it consider affiliate profits too?
I made an account there and didn't pass the KYC yet but I got bunch of referrals there  , Now I need to pass kyc to withdraw my profits from my referrals?


Most likely not... The restriction that is placed on you after you hit a trade volume threshold only restricts your trading, and doesn't restrict you withdrawing your BTC from the platform. At least, not yet.

Plus, I doubt that the bunch of referrals that you have will generate you any sort of significant earning anyways, and right now LocalBitcoins is only targeting users with significant amounts traded over the past 12 months.

Again, keep an eye out for new rules etc., LBC has changed a lot over the past few months.

ajochems
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May 11, 2018, 10:36:53 AM
 #39

So we all knew that LBC was already going down the path of forced verification for advertisers, and they made the move that all advertisers will have to verify themselves before they can trade back in January.. And then later there was a warning for all people who had a high trade volume and "recommended" that they verify their identity. But I never expected them to actually restrict somewhat high volume traders so fast, since I was greeted with this message:

Quote
You need to verify your identity before you can continue trading. Proceed to verify your identity

I mean, you could still create new accounts and trade from them anonymously, but it's a tedious process to go through email and phone verification all the time. And a lot of offers won't be available to you because of the fact that you can't consistently trade up for a good reputation.

Time to move to a new p2p trading platform?

I had using this LBC more than a year,the main advantage of this site is they will provide escrow for every trade.The compulsory submission of Identity is good from my point of view.Because ,no fake account will be created.If they have multiple accounts,the trader may scam with any one account.I like the system of One Account for one user.With all this,you can get back the bitcoin .If you released before the transaction by contacting to Support of LBC.
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May 14, 2018, 07:55:51 AM
 #40

The unfortunate side of this is that people will have to turn to the more shady platforms to trade <Peer-to-peer> anonymously.  Angry  You can still use these platforms for smaller trades, but it is risky in countries where Bitcoin is being "banned". <Like we saw happening when China temporarily closed the Bitcoin exchanges>

I have built up a "trusted" network of friends for these Peer-to-peer trades over time and I can even trade with them, without using escrow services, but newbies will unfortunately not have that privilege.  Roll Eyes

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