LocalBitcoins has suddenly begun suspending long-time user’s accounts
Bitcoin exchange LocalBitcoins, commonly used as a measure of interest rates and bitcoin prices worldwide. Many people have taken to social media to express their frustration, while news outlets in the Middle East, Africa and Asia have also reported on the situation. It seems that these accounts belong to long-time users; Those who have been serviced by exchange for many years, and the closure is taking place without any prior warning.
Messages were sent to account holders by LocalBitcoins in countries including Afghanistan, Syria, Nigeria, Iraq and Pakistan notifying that they can “withdraw bitcoin by deleting account”. However, some users said they could not access their funds.
A Nigerian user who manages a three-year account says:
One of my customers was due to travel out of the nation and had to sell some of his bitcoin to be able to go only to notice on his way to the airport that he cannot even access his funds.
The exchange issued a follow-up message explaining that customers of certain countries must undergo a robust due diligence process to continue trading with local Bitcoin, although LocalBitcoins does not give an indication of what the process is or when the details will be clarified.
The European Union’s strict new anti-money laundering regulations go into effect this month, requiring bitcoin and cryptocurrency platforms and wallet providers to identify their customers as a result of the suspension.
However, LocalBitcoins, which is famous for being a relatively anonymous way for bitcoin users around the world to buy and sell bitcoins, claims to have complied with the new laws early last year, allowing plenty of time to verify. User identity verification before the change takes effect this month. The exchange has seen its trading volume decrease by up to 70% in the last months of 2019.
Sebastian Sonntag, CEO of the exchange, explained that, at one time, was signing up anywhere between 4,000 and 5,000 new users every day, but many changes were coming with the platform that were likely to have an “impact on overall trading volume.”
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