LocalBitcoins Cash-in-person trades removed?

[PrimeNumber7]

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.

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[DebitMe]

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.

[PrimeNumber7]

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. 

[figmentofmyass]

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.

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.

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

[DebitMe]

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. 

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.

[PrimeNumber7]

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.  

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.

[hugeblack]

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/

[figmentofmyass]

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?

[magneto]

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.

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.

[buwaytress]

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.

[AdolfinWolf]

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.

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.

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.

[gentlemand]

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.

[figmentofmyass]

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.

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?

[LeGaulois]

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.

[PrimeNumber7]

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.

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 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.

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.

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.

[malevolent]

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.

[timerland]

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.

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.

[DebitMe]

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.  

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.

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

[figmentofmyass]

@figmentofmyass As for an alternative, Paxful is the only one I'm aware of. All others have a so low users base.

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.

[PrimeNumber7]

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.

Very disappointing indeed.

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

I was referring to section 230 of the Communications Decency Act, 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.