Peer-to-peer Bitcoin exchange LocalBitcoins has seemingly removed the option for users to trade crypto for cash.
Founded in 2012, LocalBitcoins is one of the longest-running exchanges available today. It facilitates trades via bank transfers, PayPal, Western Union, and other online payment processors.
Sellers used to be able to list Bitcoins for sale in exchange for cash, but this option has now seemingly been removed, although LocalBitcoins is yet to issue an official update.
Users on Reddit have claimed that pending cash trades were also cancelled without warning.
In January, it was reported that LocalBitcoins had suffered a security breach, with some claiming that their wallets had been “wiped” by hackers.
Then, in April, there was a case of a man being sentenced to two years in prison for failing to comply with AML and KYC regulations after selling Bitcoins for cash through the exchange.
Buying BTC is easy and safe thanks to the escrow system. If any issue comes up after paying, never cancel a trade – dispute it and wait for LBC’s instructions. В случае возникновения проблемы никогда не отменяйте сделку – начните спор и дождитесь указаний LBC. pic.twitter.com/9JMCpSIm6V
— LocalBitcoins.com (@LocalBitcoins) May 3, 2019
This latest move to remove the cash-to-crypto option by LocalBitcoins could be in response to the sentencing, with regulatory scrutiny surrounding digital assets seemingly on the rise.
One of cryptocurrency’s major shortfalls has been its connection to criminality and money laundering. The ability to sell Bitcoins for cash could have been an avenue for criminals to “wash” illicitly earned Bitcoin into untraceable cash.
In response to LocalBitcoins’ removal of cash trades, LocalEthereum has announced that it is removing all fees on cash trades.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.