A Finland-based Bitcoin exchange, which has been in service for more than 10 years, announced that it has terminated its services, citing difficult market conditions.
LocalBitcoins shuts down P2P service
Finland-based P2P cryptocurrency platform LocalBitcoins is shutting down its operations after serving its customers for over 10 years. The exchange officially announced the termination of services on February 9, citing the challenging market conditions of the ongoing crypto winter.
LocalBitcoins customers will have 12 months to withdraw their cryptocurrencies from their LocalBitcoins wallet. “Despite our efforts to overcome challenges during the ongoing crypto winter, we regretfully come to the conclusion that LocalBitcoins can no longer provide the Bitcoin service,” the firm said.
https://twitter.com/LocalBitcoins/status/1623683223178862593
LocalBitcoins encouraged all its customers to withdraw their cryptocurrencies from the platform, prompting them to continue withdrawing Bitcoin. According to the announcement, users will be able to withdraw their cryptocurrencies from LocalBitcoins for 12 months. “But, of course, we recommend that you continue to pull back before,” the firm says.
According to the termination timeline, LocalBitcoins will immediately suspend all new registrations from February 9. Trading will be suspended on February 16, after which time users will only be able to login to the wallet to withdraw their funds.
The shutdown came shortly after the Bitzlato sanction
The abrupt shutdown of LocalBitcoins comes shortly after the US Financial Crimes Enforcement Network mentioned the platform to Russia-linked exchange Bitzlato among the largest senders of Bitcoin. US authorities launched a major sanctions action against Bitzlato, accusing Bitzlato of money laundering and allegedly facilitating the breaching of sanctions against Russia. As Kriptokoin.com, we have included the details in this article.
Jukka Blomberg, head of marketing at LocalBitcoins, denied any collaboration or relationship with Bitzlato in a statement in January:
According to our data, there has been almost no transaction between LocalBitcoins and BitZlato since October 2022, when we stopped serving Russian user accounts and those of users residing in Russia.
Trading volume of Bitcoin exchange LocalBitcoins has been falling since its 2017 peak
Blomberg also emphasized that LocalBitcoins has been regulated by the Finnish Financial Supervisory Authority since 2019 and strictly complies with Know Your Customer and Anti-Money Laundering regulations.
As previously reported, Russia was once one of the largest markets for LocalBitcoins, peaking Bitcoin volumes on the platform as of June 2020. According to Coin Dance data, overall trading volumes on LocalBitcoins are declining rapidly after hitting an all-time high in December 2017.
LocalBitcoins’ weekly Bitcoin volume dropped below 1,000 BTC in February 2021 and hasn’t returned since. LocalBitcoins’ last recorded weekly BTC trading volume was 283 BTC, or about $6 million. In contrast, major exchanges like Coinbase trade $282 million in crypto daily, according to data from CoinGecko.
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