The bitcoin marketplace Localbitcoins was once the most popular peer-to-peer (P2P) trading platform. But during the last few years, the company’s trading requirements and KYC implementation have caused an influx of traders to migrate to different P2P crypto markets. The mass departure has caused business on Localbitcoins to drop like a rock and volumes haven’t been this low since 2017. Additionally, alternative P2P trading platforms like Paxful are being criticized for their restrictions against certain countries.
The Aftermath of Localbitcoins’ Recently Implemented KYC and Trading Restrictions
The P2P marketplace Localbitcoins.com is a business headquartered in Helsinki, Finland and it has provided an over-the-counter (OTC) trading platform since 2012. Localbitcoins quickly became a popular avenue to acquire bitcoins because it allowed users to post offers on the website and it provided people with an avenue to trade in a P2P fashion, without much third party interference. In the early days, there was very little know-your-customer (KYC) requirements and trading restrictions.
Back then, you could trade as much as you wanted and didn’t have to verify your identity on the Localbitcoins platform. These days it’s an entirely different story and Localbitcoins has been criticized on multiple occasions for enforcing strict KYC practices and adding trading restrictions. Traders now have to identify themselves if they want to trade a significant number of bitcoins by submitting a photo ID.
In May 2019, residents from Iran were banned from trading on the Localbitcoins platform. When an Iranian visitor attempts to visit Localbitcoins.com there’s a geo-restriction message that says: “Unfortunately Localbitcoins is currently not available in your selected region – Please look for another location or come back later.” Not too long after the Iran restriction, on…