A new victim of the bear market we are currently going through. LocalBitcoins, the historic peer-to-peer cryptocurrency trading platform, has announced it is shutting down after ten years of operation
Clap de fin pour LocalBitcois
It’s an important page turning for the cryptocurrency world. The world’s largest Bitcoin (BTC) peer-to-peer platform, LocalBitcoins, has announced its closure after 10 years of operation.
– LocalBitcoins (@LocalBitcoins) February 9, 2023
Founded in 2012, LocalBitcoins was a website that connected Bitcoin buyers and sellers by offering the ability to conduct the transaction online or live.
In a statement released on 9 February, LocalBitcoins said it was unable to “overcome the challenges of this ongoing cryptocurrency bear market”. The company announced that it was ending the ability to sign up and create a new profile.
Customers are being asked to withdraw funds stored on the platform as soon as possible. Starting next week, customers will only be able to log in and withdraw their bitcoins, as the statement said:
We encourage all of our customers to withdraw their funds from LocalBitcoins, and we ask that you proceed to withdraw bitcoins from your LocalBitcoins wallets. You have 12 months to withdraw your funds, but of course we encourage you to do so as soon as possible. “
The effect of the bear market and regulation
It’s been several years now that LocalBitcoins has seen a gradual decline in trading volumes and user numbers. Very popular between 2015 and 2019, the platform allowing anonymous bitcoin purchases has quietly lost its appeal to users.
First, LocalBitcoins suffered from the growing regulation in the cryptocurrency industry. Between 2014 and 2016, there were several rumours that LocalBitcoins users had broken anti-money laundering laws. Allegations that turned out to be true as two people were convicted in 2016.
In 2019, being based in Helsinki, the platform had to comply with local regulations and therefore removed some features, including cash payments.
Later, in 2020, LocalBitcoins had started to delete little by little users’ accounts, without informing them of the move. A move that obviously displeased the concerned investors and the community.
For all these reasons, the P2P platform gradually observed a decrease in the number of customers, who initially came looking for anonymity and a variety of services that had disappeared.
Of course, LocalBitcoins has also suffered from the development of the market and the birth of many competing platforms in the P2P sector (Local.Bitcoin, LocalEthereum, etc.). But above all, it is the mindset of investors that has changed, as they turn more easily to classic centralized platforms, such as Binance, Coinbase or Kraken.
