LocalBitcoins Confirms It No Longer Supports Local Cash Trades
LocalBitcoins has confirmed that the peer-to-peer (P2P) cryptocurrency exchange has removed support for local fiat trades.
The global platform made the official announcement via a tweet posted on June 4.
Reports to the effect that the Finland-based platform had removed trading in local cash first surfaced on June 1. The move, which the p2p exchange had ostensibly implemented silently, caused widespread outrage from users across the crypto community.
But releasing the official statement on the matter, LocalBitcoins explained that the decision was due to the need to adhere to the Act on Detecting and Preventing Money Laundering and Terrorist Financing.
The firm noted that regulations determine its legal responsibility, which necessitates that the exchange adheres to given sanctions.
The platform noted that they had to adjust to a new regulatory environment, which meant they had “reconsider [their] policy on local cash trades.”
LocalBitcoins also explained that it had to re-evaluate its policy regarding the geographical regions in which it offered its bitcoin trading service.
The exchange wrote:
“As a consequence, advertisements in the cash category (i.e. local cash trades) were disabled in our platform on Saturday 1st June.”
LocalBitcoins’ move comes at a time when the Finnish Financial Supervisory Authority begins to implement regulatory legislation recently passed by the Finnish government. It also follows the crypto exchange’s move to ban Iranian users.
LocalBitcoins has moved to undertake these changes in response to growing regulatory pressure that is also coming from the U.S. as well as from E.U. The platform may also not be keen on sanctions that may result if regulators deem it to have flouted AML laws.
In the meantime, Bitcoin (BTC) price declined further on Tuesday, dipping below $8,000 after rallying to new highs in May. The declines since June 1 came at the same time as LocalBitcoins took its decision to remove cash trades.
Bitcoin currently trades at $7,825 against the U.S. dollar, down 1.75% on the day and nearly 9% in the red over the last seven days.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.