LocalBitcoins revealed earlier today that it is shutting down its services after being operational for more than a decade. It is one of the earliest and best-known peer-to-peer Bitcoin exchanges.
The beleaguered crypto firm explained its announcement: “We are proud of what we have achieved together with all of you, our loyal community,” but that it can no longer provide its service due to the “challenges during the ongoing very cold crypto-winter.”
The firm stated more expressly in its farewell post on its official website:
“Dear Valued Customers, Originally LocalBitcoins was established to Bring Bitcoin Everywhere and drive global financial inclusion. 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.
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 to withdraw sooner.
Thank you for being a part of the LocalBitcoins family! It has been our honor and pleasure to serve you over the last decade.”
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With the suspension of new signups announced today, deposits and trading will cease on the 16th of February. After February 17th, users will only be able to process withdrawals of their bitcoin from their wallets.
As stated in the above announcement, they have only 12 months to withdraw all their assets. Failure to withdraw assets within this specific time might attract a potential loss of assets. However, according to the official LocalBitcoins Twitter account, the platform has continued to release new features, including a one-click BTC purchase function as recently as January 22.
LocalBitcoins’ Pedigree
LocalBitcoins was created in 2012 by Jermias Kangas. Situated in Helsinki, Finland, LocalBitcoins became a household name and one of the most popular cryptocurrency exchanges in the world. The service provided by LocalBitcoins connected Bitcoin buyers and sellers, with the coins stored in escrow until both parties reach an agreement and confirm the transaction.
According to a CipherTrace investigation from 2019, the platform was one of the main hubs for illegitimate Bitcoin transactions. Since then, the company has implemented Know-Your-Customer (KYC) capabilities powered by Onfido and banned cash transactions on the platform.
According to Onfido, the site has users from 189 different countries that have been added and authenticated. In 2021, the network went beyond Bitcoin and started giving users access to a few cryptocurrencies, including Cardano and Dogecoin.
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As stated by Invezz, LocalBitcoins’ trading volume averaged between $5 million and $7 million in the last four months, portraying a considerable drop from its previous volumes of as much as $100 in 2017.
Unfortunately, in October 2020, the platform was banned in Russia after the Russian telecommunications services regulator restricted it from providing services in the country. KocalBitcoins’ fall is devastating news to the crypto community at large.
One of the oldest in the sector seems to be headed for oblivion amidst the persisting woes of the winter market. Other crypto firms are encumbered with similar problems due to liquidity issues associated with the fall of the FTX crypto exchange, which has decimated the crypto sector with several injurious strokes.
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