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LocalBitcoins Deactivates Cash Payment Options For Bitcoin

LocalBitcoins

Peer-to-peer Bitcoin exchange and escrow platform LocalBitcoins, has quietly removed the feature that allows users to trade bitcoin for cash. The platform has not yet made an official announcement for the new adjustment, but a LocalBitCoins user pointed out the change on Reddit on Sunday. The platform has also reportedly canceled current trades. At press time, there are deliberations that the restriction will be limited to the US only.

The platform, which is a reliable and easy way for users to trade crypto anonymously, seems to have made the new decision so its operations can align with the European Union’s (EU) new anti-money laundering directive. Globally, governments are bearing down on platforms that allow users to trade on cryptocurrency exchanges anonymously, without the hassle of KYC procedures, and it seems that they have gotten to LocalBitcoins too. The platform had announced earlier in February that it would comply with the provisions of the directive.

Most Bitcoin enthusiasts are, however, speculating that the decision may have been forced on LocalBitcoins by an external party, because they had a system that worked and profited both the platform and the users that had ease of anonymous trades because of it.

LocalBitcoins has been making all manner of restrictions in 2019. Last month, it banned Iranian users from using the site. The platform also confirmed that ID verification would be required from customers once they hit certain transaction volumes on the site. Just like the new restrictions, it remains unclear if the new rule would affect all LocalBitcoins regions and the amount that constitutes as significant in the eyes of the platform.

“Error! Your trade volume has been significant in the past 12 months. Please, verify your ID to continue trading,” an error message on the site reads.

Just like the motive for the removal, the actual consequences of this new restriction cannot be readily determined, seeing as it does not effectively prevent users from contacting person-to-person meetups to trade bitcoin.

LocalEthereum, another digital currency marketplace, seems to be using the trade handicap to its advantage, as they announced the removal of trading fees on all Ethereum exchange conducted on the platform, effective from June 1-July 1, 2019. “The global war on cash and privacy continues. LocalBitcoins suddenly removed all cash-in-person offers today, without any warning to its users. In response, we’ve reduced the trading fee on cash-in-person exchanges to 0%. From today until July 1st, you can buy or sell ETH with cash using LocalEthereum for free,” the platform states in a blog post.

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