This weekend came with a shock for many of us in the cryptocurrency community. LocalBitcoins, the online platform that is used widely by traders to buy and sell Bitcoin globally, stopped allowing in-person cash trades sometime around the evening of Saturday. The move came without any announcement in advance, and all pending fiat trades of the users were canceled abruptly. Clearly, the move hasn’t gone down well among traders who like trading locally within their region with the use of fiat currencies, and now many of them are thinking of ditching this platform altogether.
LocalBitcoins is one of the oldest Over-the-Counter (OTC) Bitcoin trading platform in the world. It has helped people trade Bitcoins since the time when there were only a handful of unpopular cryptocurrency exchanges in the world. Its popularity used to come not only from its age but also from its functionality that used to facilitate secure in-person trades being done with cash. There are many people who prefer buying Bitcoin with cash as electronic means of payments are almost always detected by government agencies spying on us. So, by abruptly disabling the feature LocalBitcoins has taken a step against the spirit of Bitcoin in favor of governments. This is something that no one from the crypto community expected from it.
Due to its unprecedented nature, the news spread quickly across all social media platforms. People started looking for alternatives that can be used for in-person trades, and Paxful – another P2P exchange platform – started receiving a large number of new registrations overnight. This was confirmed by none other than Paxful CEO Ray Youseff himself. Ray also exclaimed that he won’t let people down like LocalBitcoins. You can see his tweet below:
LocalBitcoins is now Remote Bitcoins. They took down all their cash offers and the refugees are flooding to @paxful VIP support for all Cash vendors! We won’t let you down. Cash is still king in the emerging world!
— Ray Youssef (@raypaxful) June 1, 2019
Interestingly, the move has come after the recent enforcement of more stringent KYC guidelines on LocalBitcoins. The company had introduced new guidelines in February, and it also stopped serving Iranians recently. It seems that all these steps are being taken according to the directives issued by the US government. Whether it’s right or wrong is a subject of debate, but it’s now clear that if you want to trade Bitcoins in-person then LocalBitcoins is not going to help you anymore.