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Author Topic: Localbitcoins bans whole countries  (Read 346 times)
Abdussamad
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January 25, 2020, 03:56:21 PM
Merited by suchmoon (7), hugeblack (1), Steamtyme (1)
 #1

Customers residing or otherwise located in the following countries are required to have an enhanced due diligence process. The countries are defined by EU commission: Afghanistan, American Samoa, The Bahamas, Botswana, Democratic People’s Republic of Korea, Ethiopia, Ghana, Guam, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands, Yemen. The process to activate the account will be introduced in the near future. If you’re not willing to wait for your account to be activated, you can withdraw your bitcoins by deleting your account.

They've frozen thousands of accounts. Twitter is in meltdown over it:

https://twitter.com/search?q=localbitcoins&src=typd

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January 25, 2020, 04:08:11 PM
Merited by suchmoon (7), malevolent (1), Steamtyme (1)
 #2

Another day, another centralized exchange springing new unannounced KYC requirements on their users and holding customers' coins hostage until they either give up their privacy or abandon their coins.

This behavior is both disgusting and scammy, but nothing new. Many exchanges have performed it in the past, some multiple times, and just pocketed the funds of the users who either didn't want to sacrifice their privacy, or were unable to meet the exchange's often ridiculous demands. Unfortunately, this particular scam will continue as there are still millions of users who don't understand why trusting a third party to hold your coins is a bad idea; I just saw another article saying Coinbase will soon be holding 1 million BTC belonging to their customers in their wallets. If you store your coins on an exchange or web wallet, be aware that at literally any point and with literally no notice, you could lose everything.

Obviously decentralized exchanges like BISQ are far better in almost every way, but if you absolutely must use a centralized exchange to buy and sell bitcoin, withdraw it to your own wallets immediately.

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January 25, 2020, 04:17:11 PM
Merited by malevolent (1), hugeblack (1)
 #3

There were warning signs with localbitcoins. They introduced KYC measures where you had to submit ID documents to a third party. That third party (onfido) used dodgy AIs to verify you and apparently didn't do so well with non-white people. So lots of people had problems getting verified on there. Now they've gone totally insane and frozen out entire countries.
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January 25, 2020, 04:19:39 PM
Merited by Abdussamad (2)
 #4

This at least looks like they are letting people withdraw their coins, or am I misunderstanding the quoted portion above? I learned my lesson, and now it's a quick transfer in and out as soon as I've made my exchange. I'm pretty lucky here, as there is a service for under 1000$ CAD daily if I need to sell, I just have to wait 3 days or so for the deposit sometimes less. Hell they'll even apply it against my utility bill if I so desired, which I don't but it is convenient to have this available.

I looked into using localbitcoins a few times but have always just found it easier to use the forum first, then hit the proverbial rolodex from past trades. bisq is something I've been meaning to set up in case the need ever arises. Shouldn't get to that considering I'm no longer dependant on one platform like my Quadriga days.

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January 25, 2020, 04:38:21 PM
Merited by Steamtyme (1)
 #5

This at least looks like they are letting people withdraw their coins
That's what they state, but both Twitter and Reddit are full of people complaining that accounts have been locked, unable to be deleted, requests for deletion going ignored, being placed on "forced holiday", and so forth. Take a look at this: https://www.reddit.com/r/localbitcoins/. By my count, 21 out of 25 posts on the front page are users complaining about accounts being locked, or being unable to verify or delete. Some users report they have already been waiting months for either verification or account deletion so they can withdraw their coins, and are still no further forward. There's even one of their community managers on Reddit stating that account deletion may be limited or even impossible, but gives no reasons as to why that may be the case:

https://www.reddit.com/r/localbitcoins/comments/et0r11/error_currently_you_cannot_request_account/ffeofxk/
https://www.reddit.com/r/localbitcoins/comments/esssvf/can_i_recover_my_bitcoins_without_canceling_the/ffeo2y9/

So this essentially seems like users' coins are forfeit until further notice.

Shouldn't get to that considering I'm no longer dependant on one platform like my Quadriga days.
Hope you didn't lose anything in the whole Quadriga debacle. Whatever happened with that? Last I heard it had been elevated to the FBI?

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January 25, 2020, 04:47:57 PM
 #6

So this essentially seems like users' coins are forfeit until further notice.
Well they had me in the first half then lol. Looks like another say one thing do the opposite or only help a select few.
I'm sick of seeing all this lipservice from these platforms, as they turn over a new leaf and it would be nice to see more people educated about these risks. Unfortunately most people entering the space don't get much further than google ads, or top search hits, which are heavily influenced.

Glad people are speaking up maybe it will push members that are unaffected off the platform as well. Not likely as most of the world can't see outside of their immediate issues or problems to benefit a greater good.

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January 25, 2020, 06:03:54 PM
 #7

Another day, another centralized exchange springing new unannounced KYC requirements on their users and holding customers' coins hostage until they either give up their privacy or abandon their coins.


It was announced this week by email to the users concerned. Contact by email is a lot better than a blog post that nobody spends the time to read, or a tweet in the sea. Can't really blame Localbitcoin if it abides by the laws, it's a result of the latest anti-money laundering directive.

The fact some users are unable to withdraw is surely a technical point while they're working on something (preparing the Exodus or something else) I don't think Localbitcoin is going to lie on something like this, not in its interest.

But its trading volume will certainly be slapped in the face one time more

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January 26, 2020, 12:12:15 AM
Merited by o_e_l_e_o (1)
 #8

Can't really blame Localbitcoin if it abides by the laws, it's a result of the latest anti-money laundering directive.

The fact some users are unable to withdraw is surely a technical point while they're working on something (preparing the Exodus or something else) I don't think Localbitcoin is going to lie on something like this, not in its interest.

I won't blame them for AMLD5, but I will blame them for pulling the rug out from under their customers. If they planned to implement EDD on every customer from 20+ countries, they should have informed them weeks/months in advance. Instead, they induced a crisis by mass locking accounts.

LocalBitcoins tends to bend over backwards -- and hastily so -- for their government overlords. Is that what we get for a using a service based in Finland? Probably.

LocalEthereum (now LocalCryptos) is based in Australia and seems much more hands off. No KYC required and just a blanket "follow your local laws" clause in the user agreement:

Quote
If you access this website from outside Australia, you are solely responsible for ensuring compliance with your local laws and for any reliance on our website content. If your local laws do not permit you to access services provided by LocalEthereum, then you must not access this website.

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January 26, 2020, 12:53:05 AM
 #9

It was announced this week by email to the users concerned. Contact by email is a lot better than a blog post that nobody spends the time to read, or a tweet in the sea. Can't really blame Localbitcoin if it abides by the laws, it's a result of the latest anti-money laundering directive.

Technically speaking, it's Finnish laws that they're complying with which were amended to comply with AMLD5. They could have relocated to a different EU country which would have bought them some time, or they could have relocated somewhere outside the EU/EEA.

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January 26, 2020, 04:20:10 AM
 #10

It seems that compliance with the new anti-money laundering laws will force many platforms to prepare more of these lists[1].
The thing that surprised me was that countries like Iran, North Korea, and Sudan were not mentioned in the list despite their presence on all the black lists, while countries such as Saudi Arabia, Nigeria, and Tunisia were included.
Is it related to trading volumes?



[1]
Some reports have suggested the suspensions are a result of strict new European Union anti-money laundering regulations that came into effect this month, requiring bitcoin and cryptocurrency platforms and wallet providers to identify their customers.

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January 26, 2020, 10:12:22 AM
 #11

Its all about regulation and localbitcoins can no more be considered as peer 2 peer exchange as it is just following same regulatory guidelines set for centralized crypto-trading platforms.

It may be forced to them and looks like they don't have any other choice left unless they want to have same fate as bitmixer or other anonymous crypto-platforms.

 
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January 26, 2020, 11:23:01 AM
 #12

i have seen many people who think just because it is called "localbitcoins" and it is users trading with each other, the platform must be decentralized and immune to pulling crap like this. but the reality is that localbitcoins is also another centralized exchange with different that usual exchange features.
that is why i've never touched lbc ever. i either use a centralized exchange or find other p2p methods that are really peer to peer and don't need any middle men.

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January 26, 2020, 11:51:32 AM
 #13


LocalEthereum (now LocalCryptos) is based in Australia and seems much more hands off. No KYC required and just a blanket "follow your local laws" clause in the user agreement:

Quote
If you access this website from outside Australia, you are solely responsible for ensuring compliance with your local laws and for any reliance on our website content. If your local laws do not permit you to access services provided by LocalEthereum, then you must not access this website.
LBC also did started as a peer to peer exchange without KYC or complexes, and now look how it becomes. I mean it's not also garanted that localcrypto will not change his terms and conditions toward users from selective countries. I wish not.
I don't know if this my help active/pro traders in LBC but i think i can mention about this; in localcrypto, you can import your reputation from LBC or Paxful following few easy steps set in your localcrypto account parameters. So for users who may lose their businesses due to recent LBC Tos updates and before to delete their accounts, they may export their reputation to localcrypto (old localethereum) .

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January 26, 2020, 12:12:13 PM
 #14

Quote
If you’re not willing to wait for your account to be activated, you can withdraw your bitcoins by deleting your account.

This is the glimmer of hope for most users here. At least they have presented them with an option to deactivate their accounts and withdraw their funds from the platform altogether. I wonder though what happens to unverified accounts - are they still able to withdraw funds while remaining anonymous are are they forced to jump through the KYC hoops before they are actually able to withdraw?

But yeah, this case just shows how fragile centralized platforms can be, even when it comes to the likes of LBC which was previously known for its anonymity and upholding the privacy of the users.

Now, regulatory pressures are mounting. o_e_l_e_o put it best. Use centralized exchanges at your own risk, and treat it as a transitory space for your coins, not a wallet.

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January 26, 2020, 02:30:56 PM
 #15

LBC also did started as a peer to peer exchange without KYC or complexes, and now look how it becomes.
Yeah, there was a time where LBC wasn't bad, and before DEXs were really starting to gain traction, was probably one of the best fiat on-ramps for bitcoin. I used it for a while several years ago, and ended up trading with the same person who was local to me several times, before eventually taking our trades off the platform and just doing them directly peer-to-peer. This was long before any KYC requirements, but I'm glad I left it before they turned for the worse. Unfortunately my contact moved away, and so I now largely use BISQ as my fiat on-ramp.

Quote
If you’re not willing to wait for your account to be activated, you can withdraw your bitcoins by deleting your account.
This is the glimmer of hope for most users here. At least they have presented them with an option to deactivate their accounts and withdraw their funds from the platform altogether.
Plenty of people are reporting that they are being prevented from deactivating their accounts, with no help from support who apparently have a one to two week backlog. Even if you do deactivate, there is a waiting period of 14 days before you get your coins returned, so it is too early to say whether or not this is actually running smoothly or not.

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January 26, 2020, 05:03:27 PM
 #16

Another day, another centralized exchange springing new unannounced KYC requirements on their users and holding customers' coins hostage until they either give up their privacy or abandon their coins.

This behavior is both disgusting and scammy, but nothing new. Many exchanges have performed it in the past, some multiple times, and just pocketed the funds of the users who either didn't want to sacrifice their privacy, or were unable to meet the exchange's often ridiculous demands. Unfortunately, this particular scam will continue as there are still millions of users who don't understand why trusting a third party to hold your coins is a bad idea; I just saw another article saying Coinbase will soon be holding 1 million BTC belonging to their customers in their wallets. If you store your coins on an exchange or web wallet, be aware that at literally any point and with literally no notice, you could lose everything.

Obviously decentralized exchanges like BISQ are far better in almost every way, but if you absolutely must use a centralized exchange to buy and sell bitcoin, withdraw it to your own wallets immediately.

We know the risk associated with centralized exchanges but what other alternatives do we get? You mentioned BISQ but there is hardly any volume for non-European and non-US countries. Apart from BISQ there is no decentralized exchange in my knowledge which offers fiat to crypto exchange. So even if we like or not we have to use centralized exchanges for converting bitcoins to fiat or the other way around
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January 26, 2020, 05:06:34 PM
 #17

Hey. That is Roger Ver.

Get a VPN! And those geoblocks will become a thing of the past. Free movies on sonycrackle no matter where you live. Go.

PS. HEX is coming to local bitcoins.

Throw some "shit" and see what sticks.
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January 26, 2020, 09:15:57 PM
Merited by o_e_l_e_o (1)
 #18

I am genuinely triggered by LBC, I loved that site for my trades, it was so smooth and convenient, an hour ago I log in to the site, and its not letting me deposit/withdraw/trade without having me to verify my address AND identity. Fuck that, I don't want any of that shit.

But I definitely need a better alternative, localcryptos is very dead in my region. Ugh, I am so mad right now. Any suggestions???

I am hating exchanges more and more by the day.

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January 26, 2020, 09:28:24 PM
Merited by o_e_l_e_o (2)
 #19

But I definitely need a better alternative, localcryptos is very dead in my region. Ugh, I am so mad right now. Any suggestions???

Here's a nice list of LBC alternatives: https://old.reddit.com/r/Bitcoin/comments/dyclf8/list_of_bitcoin_persontoperson_p2p_bitcoin/

Unfortunately most of them aren't very active. If you're not in a hurry to make a trade, it makes sense to post some offers and take advantage of an opportunity to make more profit on a trade.

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January 26, 2020, 10:00:56 PM
 #20

You mentioned BISQ but there is hardly any volume for non-European and non-US countries.
Volume is currently the biggest issue by far with all decentralized exchanges. Unfortunately too many people are willing to give up their privacy and security for the convenience of a KYC-enforcing, custodial, centralized exchange. As time goes on, it will change though. It's much like bitcoin itself.

As governments spy more and more on their citizens, as banks decide more and more what their customers are and are not allowed to do with their own money, as corporations mine more and more of your data, bitcoin becomes more attractive to more people.

As more and more CEXs are hacked, freeze more and more accounts, demand more and more invasive KYC, then decentralized exchanges become more attractive to more users.

It's just a real shame that for most people it takes a centralized exchange to screw them over one way or another before they realize the benefits of a platform such as BISQ.

In terms of being forced to use a CEX, check out the great list that malevolent has linked to above. There are a variety of other DEXs you could try if BISQ isn't an option in your area. There are online communities which trade peer-to-peer, including the marketplaces on this forum and various sub-reddits. There are physical stores and ATMs, voucher and gift card exchanges, marketplaces, and so forth. There might well be an option you simply haven't looked in to yet.

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