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Venezuela Sets New Bitcoin Volume Record Thanks to 10,000,000% Inflation

More bolivar traffic appeared on P2P exchange Localbitcoins than any time in history last week.

Venezuelans traded more bolivars for Bitcoin (BTC) than ever before last week, but the statistics say more about fiat than cryptocurrency

Yet another Bitcoin volumes record for Venezuela

Data from Coin Dance, which tracks trading activity on P2P exchanges Localbitcoins, Paxful and Bisq, confirmed the seven days to July 20 were Venezuela’s biggest on record.

During that period, users on Localbitcoins alone generated volumes of over 57 billion bolivars, beating the previous all-time high of 49 billion, which appeared in the previous week. 

As Cointelegraph reported, Venezuela’s currency continues to suffer from runaway inflation, which estimates claim has reached 10,000,000%, leading citizens to resort to alternative means of storing value. 

The country’s official alternative, state-issued digital currency Petro, was declared a failure by a United States nonprofit this month. 

But there’s a catch

Yet as the bolivar count on Localbitcoins keeps growing, in Bitcoin terms, the number is falling. The 57 billion figure for last week equated to just 574 BTC — considerably less than in some previous weeks earlier this year. 

Underscoring the weakening bolivar, Venezuela’s cryptocurrency trading is not supported by the government, which also imposed embargoes on foreign currency. 

Earlier this year, the Lightning Torch transaction relay raised 0.4 BTC ($4,000) in funds among Bitcoin users for Venezuelans unable to escape the country.

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Argentina Drives Global LocalBitcoins Volume to Highest Since November

Trading volume on Finnish peer-to-peer bitcoin exchange platform LocalBitcoins hit the highest level since November 2018.

Trading volume on Finnish peer-to-peer (P2P) bitcoin (BTC) exchange Localbitcoins hit a high not seen since November 2018, reveals data shown on cryptocurrency analytics website CoinDance.

According to data from CoinDance, LocalBitcoins global weekly bitcoin trading volume hit $65.6 million in the week ending on Sunday, July 7. This is the highest level since November last year when the weekly trading volume of the platform hit $67.7 million in the week ending on Sunday, November 24, 2018.

LocalBitcoins Global Weekly Trading Volume

LocalBitcoins Global Weekly Trading Volume | Courtesy of CoinDance

In some countries, last week represented an all-time high LocalBitcoins volume. For instance, in Argentina, last week the platform’s trading volume hit a new high of over 15.22 million Argentine Pesos (over $364,000). 

Venezuela also saw over 47 billion in Venezuelan Bolivars traded, the highest volume to date. Worth noting, however, is that the volume has actually been decreasing in BTC terms, highlighting the rampant hyperinflation plaguing the country. 

Nevertheless, the rise in volume has not gone unnoticed. Senior market analyst at stock exchange Etoro Mati Greenspan pointed out in a tweet sent earlier today that the current levels are at their highest since November last year and commented:

“Peer to peer bitcoin trading is strong atm.”

Previously, LocalBitcoins lost a portion of its traders after quietly removing in-person cash trading from its service at the beginning of June. The company publicly confirmed the ban on Twitter and stated that the platform had to renounce local cash trading to “adapt to the current regulatory environment.”

As Cointelegraph reported at the end of June, P2P bitcoin trading platform Bisq is seeing record trading volumes after Localbitcoins removed in-person cash payments.

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Bitcoin DEX Bisq Sees Record Volume After Localbitcoins Bans Cash

Bisq had its best week in its history last week, while Localbitcoins volumes continued falling despite the bitcoin bull run.

P2P bitcoin (BTC) trading platform Bisq is seeing record trading volumes as users drop Localbitcoins, data from monitoring resource Coin Dance confirmed this week. 

Bisq, the DEX formerly known as Bitsquare, is a decentralized application facilitating crypto-to-fiat trades without a formal intermediary. 

For the week ending June 22, the most recent period for which data is available, the platform handled $6.1 million, its best performance on record. 

Noticeable upticks came from markets as diverse and the United Kingdom and Brazil, the former seeing its second-biggest volumes. 

The increased activity comes weeks after Localbitcoins, traditionally the go-to P2P trading platform, abruptly withdrew the option for users to meet and perform trades for cash

Part of a series of increased know-your-customer (KYC) moves, dropping cash sparked criticism, with competitor LocalEthereum rushing to hook deserted traders. 

Many P2P markets rely heavily on cash exchange, as users either have no access to the banking system or feel unable to rely on it, as is the case with countries such as Venezuela.

The latest data underscores the change in consumer habits with Localbitcoins failing to capitalize on bitcoin breaking $10,000 and higher.

Volumes across the platform for the seven days to June 22 actually fell compared to previous weeks, reaching $56.4 million.

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Hodler’s Digest, June 3–9: Top Stories, Price Movements, Quotes and FUD of the Week

Tron CEO Justin Sun gets to lunch with Warren Buffett for $4.5 million, while Facebook’s coin may come out this month.

Coming every Sunday, the Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

Mt. Gox’s Karpeles: “Press Rumors About My Blockchain Plans Are False”

Mark Karpeles, the former CEO of long-defunct Japanese cryptocurrency exchange Mt. Gox, denied press claims this week that he is returning to blockchain. Karpeles said that his activities with Tristan Technologies will not involve the cryptocurrency sector, as previously reported, and that the firm is not a startup and not related to blockchain. In comments to Cointelegraph, Karpeles said that he wasn’t “sure how this got reported wrong” and that his main goal is to “try to bring back Japan near the top of the IT industry.” A judge acquitted Karpeles of embezzlement in March and is currently appealing a lesser conviction of data manipulation, all in relation to the hack of Mt. Gox.

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SEC Sues Kik for Conducting Allegedly Unregistered $100 Million ICO in 2017

Canadian startup Kik has been sued by the United States Securities and Exchange Commission (SEC) for an unregistered $100 million token offering. According to the SEC’s complaint, the commission alleged that Kik’s digital token sale was not compliant with U.S. securities laws, as it had not registered the offering with the proper authorities. The SEC’s complaint comes right after Kik’s recent announcement that the company is launching a $5 million crypto initiative to fund a lawsuit against the SEC, with a campaign called DefendCrypto. Steven Peikin, co-director of the SEC’s Division of Enforcement, said in a press release that, by conducting its kin token sale, Kik “deprived investors of information to which they were legally entitled and prevented investors from making informed investment decisions.”

Tron’s Justin Sun Wins eBay Charity Auction in $4.57M Bid to Lunch With Warren Buffett

Justin Sun, Tron founder and CEO, has won an eBay charity auction to have lunch with Warren Buffett, renowned investor and CEO of Berkshire Hathaway. In order to win the lunch, which Buffett has participated in for 20 years, Sun allegedly bid a record-breaking $4,567,888. The winner will be able to bring along seven friends to a New York steakhouse, and all proceeds from the auction go to San Francisco-based nonprofit Glide Foundation. Sun wrote in a statement that the bid was a key priority for the Tron and BitTorrent team. Buffett has long been known for his negative stance on cryptocurrencies, although he has made positive comments in regard to blockchain.

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LocalBitcoins Confirms Removal of Local Cash Trades

Global peer-to-peer (p2p) crypto exchange LocalBitcoins officially confirmed this week the removal of trading in local fiat currencies. The Finland-based exchange had previously removed the cash trading option on June 1 with no announcement, which caused some outrage in the crypto community. In an official statement this week, the exchange noted that its liabilities are determined by the Act on Detecting and Preventing Money Laundering and Terrorist Financing, which requires them to follow certain regulations. The move comes on the heels of the news that LocalBitcoins will soon become monitored by the Financial Supervisory Authority of Finland, as the Finnish government passed new legislation for crypto assets earlier this year.

Report: Facebook to Announce Cryptocurrency Project This Month

Social media giant Facebook will reportedly announce its cryptocurrency project this month, and employees will be allowed to take part of their salary in the coin. According to unnamed sources, the white paper for the coin will be released on June 18. As well, Laura McCracken, Facebook’s head of financial services and payment partnerships for Northern Europe, said in an interview this week that the stablecoin would not only involve a U.S. dollar peg. Other media reports this week have noted that there are now 100 people known to be working on the crypto project via profiles on professional networking platform LinkedIn.
Winners and Losers

This week in the markets, bitcoin is below $8,000, trading at around $7,933, ether is at $245 and XRP at $0.41. Total market cap is about $253 billion.

The top three altcoin gainers of the week are posscoin, bitcoin 2 and hempcoin. The top three altcoin losers of the week are bzedge, pandemia and quantis network.

Market analysis

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

 

“The unwillingness to allow more competitors to offer geared ETFs seems to be another example of denying or curtailing access to a product that would be useful to some investors.”

Hester Peirce, commissioner at the SEC

“What a difference it would have made a decade ago if blockchain technology on a private distributed ledger accessible to regulators had been the informational foundation of Wall Street’s derivatives exposures.”

J. Christopher Giancarlo, United States Commodity Futures Trading Commission (CFTC) Chairman

“I don’t think I’m a Neanderthal, which is what I’ve been called when I’ve said I didn’t want to own bitcoin.”

Stanley Druckenmiller, American billionaire investor

“I don’t recommend bitcoin in either direction because I don’t really care for it in terms of an asset, but I do care for it as a signalling mechanism that I think was a tip-off to this bounce in gold.”

Peter Boockvar, chief investment officer at financial planning and wealth advisory firm Bleakley Advisory Group

“My love for Japan has not changed. Japan used to be engineering superpower in terms of its PCs but right now, taking the cloud for example, it’s the U.S. that dominates. But I still believe in the potential Japan has and I would like to develop that.”

Mark Karpeles, former CEO of the now-defunct bitcoin exchange Mt. Gox

“The lack of financial inclusion is not a ‘bug’ of the traditional financial system. It’s a direct result of the regulatory architecture and the intermediaries policies.”

Andreas Antonopoulos, well-known bitcoin educator and crypto commentator

“I do not know what bitcoin is.”

Jair Bolsonaro, president of Brazil

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FUD of the Week

Report: Polish Exchange Shuts Down and Disappears With Customers Funds

Coinroom, a Polish cryptocurrency exchange, has reportedly shut down its operations and disappeared with customer funds. While the total amount lost has not been disclosed, some users said that they had up to 60,000 zloty (around $15,790) in their accounts. Before ending its operations, Coinroom reportedly asked customers in an email to withdraw their money in one day, while in reality, customers have said that they were unable to get all of their money in this final withdrawal. A spokesperson for the district prosecutor’s office in Warsaw said that proceedings had been initiated against Coinroom for unregistered crypto payment services.

New Malware Campaign Spreads Trojans Through Clone Crypto Trading Website

According to Twitter user and malware researcher Fumik0_, a new website is spreading cryptocurrency malware. The aforementioned site reportedly imitates the website for Cryptohopper, a site where users can program tools to perform automatic cryptocurrency trading. After a user goes on the site, which displays the logo of Cryptohopper in an attempt to trick the user, it automatically downloads a setup.exe installer that will infect the computer once it runs. The installer infects the computer with an information-stealing Trojan, which then also installs two other Qulab Trojans for mining and clipboard hijacking deployed once every minute to collect data.

Report: Nearly $10 Million in XRP Stolen in GateHub Hack

Cryptocurrency wallet service GateHub said this week that hackers compromised almost 100 XRP Ledger wallets, resulting in the loss of around $10 million. In a statement, GateHub said that it was notified by community members of the loss of funds, following which it discovered increased application programming interface (API) calls coming from a small number of IP addresses. While one of those who warned GateHub about the breach reported that almost 13,100,000 XRP ($5.37 million) had already been laundered through exchanges and mixer services, GateHub has stated that the investigation is still ongoing.

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Best Cointelegraph Features

The Land of the Free: Why Decentralization Matters in the Crypto Republic

After Tezos updated without forking and Iota introduced an ostensibly centralization-killing element, Cointelegraph examines the importance of decentralization by some of the large players in the crypto community.

Satoshi Posers — Why So Many Takers for the Bitcoin Crown?

With some anonymous Satoshi Nakomoto posers coming out of the woodwork, as well as one very not-so-anonymous Craig Wright, Cointelegraph looks at the potential motivations for claiming to be bitcoin’s father.

What Is a Satoshi, the Smallest Unit on the Bitcoin Blockchain?

In this analysis, Cointelegraph explains what exactly a “satoshi” is, why this buzzword has become popular recently, and who came up with the term itself.

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LocalBitcoin Loses Traders After Cash Trading Ban: ‘Not Very Local’

Peer-to-peer bitcoin trading platform LocalBitcoins removes in-person cash deals — what does that mean for the future of cash trades?

On June 1, Finnish peer-to-peer (p2p) bitcoin (BTC) trading platform LocalBitcoins quietly removed in-person cash trading from its service. Three days later, the company publicly confirmed the ban on Twitter. As per the accompanying statement, LocalBitcoins had to renounce local cash trading to “adapt to the current regulatory environment.”

The removal of the option has angered users, who seemingly began looking for decentralized platforms with more room for anonymity. However, as the Wild West-like unregulated days of crypto might be coming to an end, the more p2p services might have to apply Know Your Customer (KYC) and Anti-Money Laundering (AML) efforts in order to stay compliant with the watchdogs.

Brief introduction to LocalBitcoins and p2p trading

Founded in June 2012, LocalBitcoins is one of the crypto industry’s longest-standing veterans. It is headquartered in Helsinki, Finland.

Unlike Coinbase — which was established the same month — and other conventional cryptocurrency exchanges, LocalBitcoins positions itself as a decentralized service that matches people who are willing to trade bitcoin. In that sense, it is easy to compare LocalBitcoins with similar p2p services like Craigslist or eBay.

Imagine a marketplace where people post their offers to buy or sell bitcoin on a bulletin board, specifying the exchange rate and location (among other things). Interested users reply to those advertisements, choosing to either meet in person and exchange bitcoin for cash, or trade remotely using online banking.

The world turned upside down

That is what LocalBitcoins was until June 1, when the cash option was suddenly removed from the platform. Now, users can only trade via online payment options, or deposit their cash directly to the seller’s bank account.

Predominantly, people choose to meet up to buy and sell cryptocurrencies with cash for anonymity reasons, since no personal information was required in the process.

It is also irreversible, Michael Foster said, who co-founded a similarly-named p2p platform, LocalEthereum, which caters to Ethereum (ETH) users. He explained to Cointelegraph:

“There is a zero possibility of chargeback fraud, which is the hardest scam to avoid when trading P2P. Chargeback fraud is when, for example, somebody sends you money via PayPal, only to reverse the transaction after receiving the goods.”

So, this is how an in-person, cash-based crypto transaction normally happens: After being matched online, both parties arrange a meetup at a public place with Wi-Fi. Then, after receiving an envelope of cash along with a wallet address, the selling party transfers the cryptocurrency on-the-spot, using their laptop or mobile phone.

“It’s best to meet in daylight, in an area with lots of people and cameras. For extra security, bring a friend, or make the exchange inside an airport or a bank,” Foster added.

While it is difficult to call this option a safe one in the conventional sense, financially wise, it is the most secure scenario, a representative of p2p exchange Bisq told Cointelegraph:

“I see the choice as a trade-off between physical safety, financial safety, privacy, and convenience. If it’s financial safety someone prefers, then cash is king. Nothing beats obtaining cold hard cash and depositing it in your bank yourself. There’s zero chargeback risk. But that financial safety comes at a risk to physical safety. […] Non-cash payment methods get around this physical safety risk, but require a person to reveal information to a counterparty that they might not want to reveal. And these methods are usually a lot more convenient too. Which one is better or ‘safer’ is a personal judgment.”

LocalBitcoins ban was dictated by Finnish and EU AML laws

LocalBitcoins started applying KYC measures in April 2018, when a trader proved on Reddit that a personal ID was now required to buy and sell bitcoin for some trade volumes.

“Error! Your trade volume has been significant in the past 12 months. Please verify your ID to continue trading,” the screenshotted message displayed.

Expectedly, the reduction of anonymity on one of the oldest marketplaces in the industry angered decentralization pundits. “RIP localbitcoins. Hi, another centralized exchange,” read one of the top comments on the thread.

The peer-to-peer exchange kept silent until May 9, 2018, when it finally announced that updated terms of service were coming into effect closer to the end of the month. Notably, the changes were performed in accordance with General Data Protection Regulation (GDPR), a European Union decree on data protection and privacy.

Thus, starting from May 25, 2018, LocalBitcoin users were asked to verify their ID on several occasions, including “trading over certain volume limits,” as well as fraud investigations, among others. They also had to be older than 16 and register only one account per person.

Almost a year later, on March 25, 2019, LocalBitcoins announced it will soon become supervised by the Financial Supervisory Authority (FSA) of Finland, soon after the Finnish parliament approved new legislation that will provide a legal status for cryptocurrency assets.

Around the same time, LocalBitcoins banned users living in Iran, presumably due to sanctions previously imposed by the United States.

On June 1, users started reporting that cash-in trading was removed from LocalBitcoins. Again, crypto traders preferring the meetup option were displeased. “It’s time to no longer recommend LocalBitcoins, EVER,” the top response to the original Reddit report reads, while the following comment contains a list of alternative platforms.

Similarly to last year, LocalBitcoins did not issue a public announcement for several days. On June 4, a statement was finally released explaining that the removal was dictated by the local regulatory framework:

Note on the removal of Local Cash Ads

Some portion LocalBitcoins users moved to rival platforms, others attempted to bypass the ban

Four different p2p platforms approached by Cointelegraph confirmed that they have seen an increase in local cash trades ads on their platforms since LocalBitcoins removed the option.

However, in-person meetings accounted for 0.5-2% of all trades on three of those platforms, based on their answers, with one exchange reporting 16%, meaning that the general demand is quite low. A representative of the p2p bitcoin exchange Hodl Hodl told Cointelegraph:

“It [local cash trading] is not really popular, but we’ve seen an influx of traders who used to trade on Localbitcoins coming to our Telegram group and actively discussing various options on how to trade cash and suggesting improvements, which we think is great, helps us improve the workflow and we’re expecting to see more cash trades soon.”

Ray Youssef, CEO and co-founder of Paxful, another popular platform for p2p exchanges, told Cointelegraph that there was an increase in cash transactions “throughout the month of May.”

A representative for Bisq also said that it has seen more offers in the USD market lately. “Less than 2% of the trades on Bisq so far in June have been cash trades,” the spokesperson specified.

LocalEtehreum, in turn, reported “a huge uptick” in face-to-face exchanges since LocalBitcoins removed the option, in an email conversation with Cointelegraph:

“Cash exchanges made up 0.6% of LocalEthereum’s volume last month. Since the announcement, cash has climbed to 16% of volume — a 26-fold hike. We’ve never seen this level of activity for cash before.”

However, some LocalBitcoins users are not switching over, yet. Now that the “cash in-person” options are not available on the platform, some traders list those offers under the “cash deposit” tab, specifying that they are only looking for face-to-face meetups.

A United Kingdom-based trader, who has posted a similar advertisement, told Cointelegraph, “I tried to post again and it didn’t work so we tried cash deposit but that’s also kind of useless now as people want to use cash deposit service”

That trader is now considering moving to other p2p platforms. “What defeats the point of BTC anonymity is transferring funds from your own bank account through a centralized company and then purchasing BTC,” he told Cointelegraph via Telegram.

“Not very local anymore,” he said of LocalBitcoins.

Another seller based in Thailand, who prefers to stay anonymous, also confirmed to Cointelegraph that he or she was trying to bypass the local cash trades ban by listing their offer under the cash deposit tab:

“I have no idea why localbitcoins stopped the cash trades, but if they don’t make them come back in the near future, I will use other platforms. I am already looking at alternatives.”

Nevertheless, LocalBitcoins might curb those kind of ads in the near future, according to what the spokesperson for LocalBitcoins told Cointelegraph via email:

“It is not possible anymore to create local buy/sell ads for cash money, all the existing ads are being removed.”

LocalBitcoins declined to comment on how popular cash trading was on their platform prior to the removal. Also, when asked whether any other KYC-related changes should be expected from LocalBitcoins in the light of local or EU regulations, the spokesperson said it “will inform our users as soon as possible,” if something should happen.

Will other p2p platforms keep cash trading option?

Now that LocalBitcoins had to abandon the cash in-person trading, its rival p2p platforms are picking up a fraction of its traders. But will they remain pro-anonymity amid the increasing pressure of compliance in the industry? Hodl Hodl representative told Cointelegraph:

“As for us, we’d rather shut down and stop operations than subject our users to KYC/AML. There’s simply no market for a P2P exchange that does KYC/AML. The only reason LocalBitcoins is still making money is because the majority of their volume is from jurisdictions where the KYC/AML info that users provide is not yet affecting said users.”

The Hodl Hodl spokesperson agreed that it is possible that all p2p platforms will be forced to ban cash trading in the future, but argued that, since its exchange is noncustodial and doesn’t hold any bitcoins or fiat money, it might have a better chance of being cleared to operate.

LocalEthereum brought up the same argument in its conversation with Cointelegraph, arguing that its platform is noncustodial as well, and hence might be exempt from certain regulations.

Youssef of Paxful also told Cointelegraph that its service is determined to keep the cash option:

“As the Age of Compliance begins to dawn, many P2P exchanges may need to ban cash transactions as they will not have the compliance resources to handle the anti-money laundering, safety, and regulatory issues, but not at Paxful. We have a top tier legal and compliance team and we are growing our compliance efforts immensely, keeping the door open for the unbanked and underbanked worldwide.”

Thus, it is unclear if there will be another crackdown on p2p exchanges, as it largely depends on the jurisdiction in which such services are based. As previous examples from the crypto industry have shown, a company might choose to move to another country when faced with extensive local regulatory difficulties.

As for now, the p2p exchanges segment seems puzzled by the sudden crackdown, according to what the Bisq representative told Cointelegraph:

“I don’t see how buying bitcoin with cash is any different from buying bananas or bullion with cash. Neither person knows the other person, and it doesn’t matter.”

However, he added, exchanges (even peer-to-peer ones) need to follow the laws of their jurisdictions — and traders should too.

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LocalBitcoins Confirms Removal of Local Cash Trades

Following reports of the silent removal of local cash trades on June 1, LocalBitcoins has confirmed the move.

Global peer-to-peer (P2P) crypto exchange LocalBitcoins has officially confirmed the removal of trading in local fiat currencies, the firm announced in a tweet on June 4.

As previously reported, the Finland-based exchange silently removed cash trading on June 1, which immediately caused some outrage in crypto community.

In the official statement, LocalBitcoins noted that its liabilities are determined by the Act on Detecting and Preventing Money Laundering and Terrorist Financing, which requires the exchange to follow certain sanctions.

LocalBitcoins wrote:

“In order to adapt to the current regulatory environment, we had to reconsider our policy on local cash trades as well as on geographical areas where our service is available, among other platform features. As a consequence, advertisements in the cash category (i.e. local cash trades) were disabled in our platform on Saturday 1st June.”

The move comes on the heels of the news that LocalBitcoins will soon become monitored by the Financial Supervisory Authority of Finland, as the Finnish government passed new legislation for crypto assets earlier this year.

In late May, LocalBitcoins banned Iranian users from using its platform, a move reportedly prompted by the rules of the European Union.

Meanwhile, bitcoin (BTC) has seen a notable decline since June 1, with its price having plunged below the $8,000 threshold earlier today after breaking $9,000 last week.

Bitcoin 7-day price chart. Source: CoinMarketCap

Bitcoin 7-day price chart. Source: CoinMarketCap

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LocalEthereum Woos LocalBitcoins Traders After Platform Reportedly Bans Cash Trading

As executives keep quiet on the move, a competitor suspended fees for cash meetups, accusing LocalBitcoins of participating in the “war on cash.”

Finnish P2P bitcoin (BTC) trading platform LocalBitcoins has kept silent after users reported it had removed cash trading from its service on June 1.

LocalBitcoins, which allows users to trade BTC for fiat currency privately, purportedly cut the option for in-person meetups to trade crypto for cash, angering social media commentators.

“It’s time to no longer recommend LocalBitcoins, EVER,” the top response to the original Reddit report reads.

Executives from the company have so far refrained from publicly commenting on the move, which follows a slow process of Anti-Money Laundering (AML) and Know Your Customer (KYC) implementation.

As Cointelegraph reported, LocalBitcoins halted anonymous trading in April 2018, requiring high-volume account holders to identify themselves before conducting further business.

Based in Helsinki, the company reported in February that it would be working towards compliance with European Union AML/KYC standards.

Last week, LocalBitcoins sanctioned users based in Iran, again reportedly due to EU rules, a source told Cointelegraph.

For some, however, the latest change provided a marketing opportunity. LocalEthereum, the similarly-named platform catering to ether (ETH) traders, announced it had removed cash transaction fees as a direct response to LocalBitcoins.

“The global war on cash and privacy continues. LocalBitcoins suddenly removed all cash-in-person offers today, without any warning to its users,” a blog post read Saturday. It further noted:

“Meeting in person is one of the oldest ways to exchange between crypto and fiat, and it remains one of the safest. As long as you follow simple guidelines, it’s incredibly rare for anything to go wrong.”

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US LocalBitcoins Trader Who Offered Fake Real Estate Gets 21-Month Jail Term

Morgan Rockoons engaged in fraudulent activity while already on bail for unlicensed money transmission.

United States authorities have brought criminal charges against a LocalBitcoins trader in connection with operating an unlicensed money transmission business, a government press release confirmed on May 28.

As revealed by the U.S. Attorney’s Office for the Southern District of California, Las Vegas resident Morgan Rockoons will serve 21 months in federal prison for his activities, which also included a bitcoin (BTC)-based real estate fraud scheme.

According to the release, Rockoons made over a thousand trades on the P2P platform until the end of 2017.

Having failed to register as a money transmitter with the Financial Crimes Enforcement Network (FinCEN), Rockoons had fallen onto the radar of San Diego law enforcement several years earlier as the biggest-volume trader in the area.

An indictment appeared in November 2017, with arrest in February the following year. After his release on bail, however, Rockoons began operating an allegedly outright criminal business, “Bitcointopia,” offering land which never existed in return for bitcoin.

“Victims who sent Rockcoons Bitcoin never received their title to land as promised. To date, agents have identified at least 10 victims of Rockcoons’ fraud,” the release confirms.

Rockoons was again arrested in October 2018, and plead guilty to crypto-related fraud charges in related to Bitcointopia as well as to operating a money transmitting business without a license in March of this year.

In total, the profits from the activities topped $80,000, which Rockoons will now forfeit in addition to the jail term after his guilty plea.

The takedown continues an increasingly zero-tolerance policy towards informal trading in the U.S.. As Cointelegraph reported, regulators keen to standardize the landscape have brought charges against a host of individuals, many as part of the so-called Operation Cryptosweep which began in 2018.

In terms of crime, May also saw the halting of a major Ponzi scheme which involved 300 investors from the U.S. and Canada losing money to promoters of an allegedly diamond-backed cryptocurrency.

In Brazil, meanwhile, a separate swoop shut down a much larger pyramid scheme that reportedly defrauded over 55,000 people.

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LocalBitcoins Imposes Restrictions on Iranian Accounts

Major P2P crypto exchange LocalBitcoins.com has banned users based out of Iran.

Major peer-to-peer cryptocurrency exchange LocalBitcoins.com has banned users living in Iran, according to their website as of today, May 24.

Screenshot of LocalBitcoin Iranian page

Screenshot of LocalBitcoin Iranian page as of press time

A source had previously told Cointelegraph in an email that the impetus for restricting Iranian transactions is to comply with financial regulations in Finland, where the headquarters of LocalBitcoins.com is located. Moreover, exchanges are purportedly cutting off Iranian users due to sanctions previously imposed on other exchanges by the United States.

Major crypto exchanges Coinbase and Binance do not currently support users living in Iran.

One of the purported advantages of LocalBitcoins for Iranian users was that it did not require a credit card or online payment, meaning that Iranian users without international bank accounts could still buy and trade crypto, says the source.

At press time, LocalBitcoins has not responded to Cointelegraph’s request for comment.

In January of this year, Cointelegraph reported that Iran was allegedly planning to unveil its own cryptocurrency as a way to circumvent sanctions.

Earlier in May, United States Congressman Brad Sherman — a noted critic of cryptocurrencies in general — said that they are a threat to American foreign policy. Sherman suggested a complete ban on U.S. citizens purchasing crypto, as he thinks crypto diminishes the power of the U.S. dollar as an international financial standard.