Why Localbitcoin take this action ?

[SAHASAN]

My first bitcoin buy from Local Bitcoin and it was my favorite p2p site. But I don't understand why and what is the main reason to closed buy/sell service by local bitcoin?

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[Helena Yu]

Base on google, this is their reasons.

LocalBitcoins, one of the oldest and best-known Bitcoin exchanges, is closing after a decade of service, with the peer-to-peer platform citing the “ongoing very cold crypto-winter” as the reason for stopping operations.

But I don't think it's the reason because they exist since 2012 when Bitcoin price was below $1K and there was a dump in 2018, yet they were not shutdown at that time.

They were known as No KYC P2P, since they implement KYC mandatory rule on 2019, it's where they lost their customers.

Anyway, move this thread to Service Discussion section.

[PX-Z]

If you will read their statement it is because of the bear market. But of course it's not the only thing that matters, that time they required their users for KYC, as for the requirements, many users stop being active there due to that and lots of reasons including of locking of accounts too.

We are therefore sad to share, that regardless of our efforts to overcome challenges during the ongoing very cold crypto-winter, we have regretfully concluded that LocalBitcoins can no longer provide its Bitcoin trading service

[Learn Bitcoin]

Base on google, this is their reasons.

I have posted this when they announced that they will stop operating. Based on their own statement;

Why is localbitcoins terminating the service?

Localbitcoins trading volumes have been declining for a long time, and there is no big enough market demand for our services anymore.

@OP, you can use https://localmonero.co/ and https://agoradesk.com/

[SquirrelJulietGarden]

My first bitcoin buy from Local Bitcoin and it was my favorite p2p site. But I don't understand why and what is the main reason to closed buy/sell service by local bitcoin?

It is since February and now you talked about it. You are too late to realize about their service closure.

LocalBitcoins Exchange Closed After 10 Years of Operation.

It is not only LocalBitcoins, there are some P2P platforms closed their services too like Paxful, 2 months after LocalBitcoins.

Paxful is shutting down

They did it by stricter regulations. Even Kucoin required mandatory KYC a few months after that.

Before LocalBitcoins and Paxful, there is another one in October 2022, Localcryptos.
LocalCryptos is shutting down

[Potato Chips]

I have posted this when they announced that they will stop operating. Based on their own statement;

Why is localbitcoins terminating the service?

Localbitcoins trading volumes have been declining for a long time, and there is no big enough market demand for our services anymore.

I believe this is the main culprit as well. Because had they been getting a good flow of trading volume, it's likely they'll be able to hold out during the crypto winter like other companies.

It is not only LocalBitcoins, there are some P2P platforms closed their services too like Paxful, 2 months after LocalBitcoins.

Paxful is shutting down

You must have missed that paxful came back! try accessing the website again

[mk4]

Because apparently, bitcoin/crypto people like to use no KYC/AML stuff(understandably so). Unfortunately with the case of LocalBitcoins, they were forced by the hands of the authorities to ask for AML/KYC of their customers mandatorily.

[Nrcewker]

According to them, localbitcoins lost popularity and their trade volumes became very less. For this they were forced to shut down operations. But deep down we know that, if any one asks for P2P platform, then LBC comes in the mind first. So this reason is still unbelievable for many traders. Some also say that Paxful was the main reason behind this shut down. People saw more features in Paxful and hence moved there completely. The actual or convincing result for the shutdown, still remains as a mystery.

[jrrsparkles]

It is not only LocalBitcoins, there are some P2P platforms closed their services too like Paxful, 2 months after LocalBitcoins.

Paxful is shutting down

You must have missed that paxful came back! try accessing the website again

Most members are not aware of their resuming services and actual reason for centralized p2p exchanges to shut their operation is due to the implementation of p2p trades in most of the exchanges itself for example Binance p2p where people choose to trade with other users so users not interested to get KYCed on multiple platforms when all things can be done at one place.

[The Cryptovator]

A cold crypto winter would be one of the reasons behind the shutdown of Localbitcoin, but I don't think this is the main reason. There would be some law enforcement issues as well. It's true that their volume has dropped due to the many competitors on the market. Especially centralised exchanges like Binance started p2p exchange. A large number of cryptocurrency users have been involved with centralised exchanges, and often we get all services in one place. Hence, individuals lose their interests in other p2p exchanges because of centralised exchanges.

[mk4]

A cold crypto winter would be one of the reasons behind the shutdown of Localbitcoin, but I don't think this is the main reason. There would be some law enforcement issues as well. It's true that their volume has dropped due to the many competitors on the market. Especially centralised exchanges like Binance started p2p exchange. A large number of cryptocurrency users have been involved with centralised exchanges, and often we get all services in one place. Hence, individuals lose their interests in other p2p exchanges because of centralised exchanges.

It's definitely not the bear market and not Binance's P2P arm either. Even in a bear market, LocalBitcoins was the place the go, and Binance's P2P hasn't gain traction that time yet(assuming it was already around).

It's 99% law enforcement requiring AML/KYC that killed it.

[sunsilk]

It is not only LocalBitcoins, there are some P2P platforms closed their services too like Paxful, 2 months after LocalBitcoins.

Paxful is shutting down

You must have missed that paxful came back! try accessing the website again

I was thinking that LocalBitcoins have came back to their service but I was wrong with that thought and yes, that's paxful that came back and lively again. But I don't think that the same welcome from its former users will still be there.

@OP, with all of the potential reasons why they have to close their service down were already said. Bear market, regulatory pressure, not enough funding and lesser volume, etc.

But I wouldn't be surprised if the former executives of it will join force with other the same service for them to render what they've applied and learned from this company they've established.

[Darker45]

It is not only LocalBitcoins, there are some P2P platforms closed their services too like Paxful, 2 months after LocalBitcoins.

Paxful is shutting down

They did it by stricter regulations. Even Kucoin required mandatory KYC a few months after that.

Before LocalBitcoins and Paxful, there is another one in October 2022, Localcryptos.
LocalCryptos is shutting down

Stricter regulations are the easiest to use as a reason, but it might not be the real one. Although I think it's indeed the reason as far as Localcryptos are concerned, it probably wasn't as to the case of LocalBitcoins. LocalBitcoins complied with regulatory demands. Therefore, they didn't have to shutdown because of regulatory challenges. It was probably more of dwindling activity or volume brought by the crypto winter and their mandatory KYC. Localcryptos remained principled until the end; they had to shutdown.

As to Paxful, although they also mentioned it, the shutdown wasn't really about stricter regulations. It was more of internal disagreement on ownership and control. It reopened later with another CEO.

[JeromeTash]

My first bitcoin buy from Local Bitcoin and it was my favorite p2p site. But I don't understand why and what is the main reason to closed buy/sell service by local bitcoin?

All is not lost. They are actually better alternatives in terms of privacy because they don't ask for KYC yet. The only disadvantage is low liquidity, but if you really care about not handing over your KYC documents to many online platforms, they are the services to use for now.

Some have already been mentioned by other members, but let me list more

• https://localcoinswap.com/
• https://hodlhodl.com/
• https://peachbitcoin.com/
• https://bisq.network/

[Z-tight]

There would be some law enforcement issues as well. It's true that their volume has dropped due to the many competitors on the market. Especially centralised exchanges like Binance started p2p exchange. A large number of cryptocurrency users have been involved with centralised exchanges, and often we get all services in one place. Hence, individuals lose their interests in other p2p exchanges because of centralised exchanges.

LocalBitcoins were previously a p2p exchange, but they stopped being that when they made KYC mandatory, so saying they were a p2p exchange, and that competing with centralized exchanges is one of the reasons they collapsed is not true, rather what is true is that they turned into a kyc exchange and couldn't compete with other kyc exchanges, because their customers' had left them for other p2p exchanges.

LE cannot also be a reason why they shut down, LE loves kyc exchanges, they love services that can feed them with customers' data, so there was no way they were going to have problems with LE when they comply with their laws.

[khaled0111]

LocalBitcoins were previously a p2p exchange, but they stopped being that when they made KYC mandatory, so saying they were a p2p exchange, and that competing with centralized exchanges is one of the reasons they collapsed is not true

Sorry, I didn't get that! Why do you think they are not a p2p exchange anymore just because they decided to enforce kyc? And what does that have to do with being centralized or not?
Lbc was still a p2p exchange even after enforcing kyc and, BTW, I don't believe this is the reason, or the drop of their trading volume, is the reason why they had to shut down their services. Binance have the strictest kyc requirements but they still have a p2p exchange platform.

[EarnOnVictor]

My first bitcoin buy from Local Bitcoin and it was my favorite p2p site. But I don't understand why and what is the main reason to closed buy/sell service by local bitcoin?

I knew Localbitcoins but never transacted there simply because it's an old way of exchange, they've had their good moments when cryptocurrency was not as exposed as this and working in the old way is primarily the reason I believe they stopped operation, they couldn't meet up with the competition. This is the second time in less than a year and I believe they are going for good this time.

Come to think of it, they are doing KYC, this is despite that their transcription fees are so high. I don't think it would be a smart idea for anyone to deal with them when they can easily deal with regular exchanges like Binance with low fees.

In other words, cheapness and ease of doing business within exchanges might be the main cause of this, people are taking their businesses elsewhere.

[Z-tight]

Sorry, I didn't get that! Why do you think they are not a p2p exchange anymore just because they decided to enforce kyc? And what does that have to do with being centralized or not?

It is not about what i think, an exchange that makes kyc mandatory cannot be called a decentralized or p2p exchange, if you have to submit information about yourself and still deposit funds into a wallet that only the exchange controls in order to trade, then that's surely not a p2p trade, you can call it what you want, and maybe peer to exchange, and then exchange to the trading peer on the other side is suitable. Buddy, It has a lot with being centralized, because that is simply what kyc exchanges are called, and as with everything centralized, there is a single point ot failure, it could be a honeypot service and data could be fed to the LE at anytime.

Lbc was still a p2p exchange even after enforcing kyc and, BTW, I don't believe this is the reason, or the drop of their trading volume, is the reason why they had to shut down their services. Binance have the strictest kyc requirements but they still have a p2p exchange platform.

Binance have always been a centralized exchange, most of their customers have always been people who didn't mind submitting their data to centralized services, how do you compare it to LocalBitcoins that was a p2p exchange that didn't require kyc, and then decided to make it mandatory along the line, what do you think would happen to trading volume in Bisq or AgoraDesk if they make KYC compulsory tomorrow? Majority of their customers would look for another p2p alternative. And FWIW, p2p on Binance isn't true p2p.

[o_e_l_e_o]

Binance have the strictest kyc requirements but they still have a p2p exchange platform.

There is nothing peer to peer about Binance's "P2P" platform.

Peer to peer means peer to peer. It doesn't mean peer to middle man to peer. If there is a middle man called Binance with which you have to register an account, complete KYC, deposit your coins or fiat, and who can spy on everything you do, block or reverse trades, close your account, confiscate your coins, etc., then that isn't peer to peer in the slightest. It is completely centralized in all but name.

There are plenty of exchanges out there which call themselves peer to peer or call themselves decentralized when they are no such thing. This has been the case for years:

There is a problem with a lot of exchanges using the word "decentralized" as a marketing tool and gimmick, when in reality they are not decentralized at all. Sites like LocalBitcoins and IDEX which claim to be decentralized, and yet users have to deposit coins to their custodial wallets and complete KYC. Complete nonsense.

How could a truly peer to peer exchange even collect KYC? For an exchange to collect KYC then there must be a centralized third party to do that collection in the first place, at which point you are no longer trading peer to peer but trading with permission of this centralized third party. There are very few truly peer to peer exchanges out there, and even fewer truly decentralized ones. Bisq remains the best option for both criteria.

[CRAIC]

My first bitcoin buy from Local Bitcoin and it was my favorite p2p site. But I don't understand why and what is the main reason to closed buy/sell service by local bitcoin?

don't worry, binance has a good p2p platform (better than localbitcoins has)