Via an official statement, the popular peer-to-peer (P2P) crypto trading platform LocalBitcoins announced the discontinuation of its service. The company claims that the persistent downside pressure in the crypto market negatively impacted its service capacity.
LocalBitcoins Joins The List Of Fallen Companies
LocalBitcoins was created ten years ago as one of the industry’s first peer-to-peer Bitcoin trading platforms. The platform enjoyed high popularity and adoption due to its low transaction fees, community, non-custodial wallet, and ability to trade anonymously. The exchange stated:
We have honored that mission for over 10 years and we are proud of what we have achieved together with all of you, our loyal community. We are therefore sad to share, that regardless of our efforts to overcome challenges during the ongoing very cold crypto-winter, we have regretfully concluded that LocalBitcoins can no longer provide its Bitcoin trading service.
The latter feature was changed due to regulatory pressures that forced LocalBitcoins to impose a Know Your Customer (KYC) policy on its users. The decision that came into effect around 2019 was controversial and drove some customers to the company’s competitors.
As seen in the chart below, since its inception LocalBitcoins has seen an exponential increase in its trading volume. The metric dropped from 2018 to 2019 when the new KYC policy was implemented, and the crypto market underwent a crypto winter, similar to the current conditions.
According to the official announcement, the platform will stop new users from signing up for their platform from today. On February 16th, trading will be suspended along with the LocalBitcoins wallet.
Old users will still have access to their funds and the wallet, but only to withdraw them. The company will maintain this service for a year giving users time to take out their funds and send them to an external wallet. The company stated:
We encourage all customers to withdraw their funds from LocalBitcoins and we ask you to proceed with withdrawing the Bitcoins from your LocalBitcoins wallet. You have 12 months to withdraw, however of course we encourage you to proceed withdrawing sooner.
The P2P exchange is one of many crypto companies forced to halt operations during the crypto winter. The P2P crypto exchange LocalCryptos shut down in 2022, citing unfavorable market conditions.