Customers of LocalBitcoins have a year to withdraw their cryptocurrency from the LocalBitcoins wallet, however it is recommended that they do so right away.
LocalBitcoins, a peer-to-peer (P2P) bitcoin platform with headquarters in Finland and more than ten years of client service, is ceasing operations. On February 9, LocalBitcoins made a formal announcement that the company was ceasing operations due to the challenging market conditions brought on by the continuing bitcoin winter.
“Regardless of our efforts to overcome challenges and turn our trade volumes and declining market share back to growth, we have regretfully concluded that LocalBitcoins can no longer provide its Bitcoin trading service.”
All users were urged by LocalBitcoins to remove their cryptocurrency holdings from the service and to go ahead and remove Bitcoin from their LocalBitcoins wallet. Users can withdraw cryptocurrency from LocalBitcoins for a period of 12 months, according to the release. However, the corporation stated, “Of course, we encourage you to proceed with withdrawing sooner.”
The termination schedule states that starting on February 9, LocalBitcoins would instantly stop accepting any new registrations. On February 16, trading will be put on hold, and users will then only be allowed to access their wallets to withdraw money.
The sudden closure of LocalBitcoins comes just after the United States Financial Crimes Enforcement Network listed the service as one of the largest Bitcoin senders to the exchange Bitzlato, which has ties to Russia. Authorities in the United States brought a significant enforcement action against Bitzlato, charging the company with money laundering and aiding in the suspected circumvention of Russian sanctions.
In a statement to Cointelegraph in January, Jukka Blomberg, chief marketing officer at LocalBitcoins, denied any form of collaboration or contact with Bitzlato. He asserted:
“Based on our data there have practically been no transactions between LocalBitcoins and BitZlato since October 2022, after we stopped serving Russian user accounts and accounts of users residing in Russia.”
Blomberg further emphasized that LocalBitcoins rigorously adhered to Know Your Customer and Anti-Money Laundering legislation and was governed by the Finnish Financial Supervisory Authority since 2019 as well.
Russia used to be one of the major markets for LocalBitcoins, leading Bitcoin trading volumes on the site as of June 2020, as was previously reported. Following a record-breaking peak in December 2017, the overall trading volume on LocalBitcoins has started declining.