After more than a decade of operations, the Helsinki, Finland-based bitcoin peer-to-peer exchange Localbitcoins is shutting down due to the ongoing crypto winter making it impossible for them to provide their services as bitcoin buyers and sellers.
The Challenges Faced by Localbitcoins and Its Disappearance from the Crypto Market
Localbitcoins, the world’s first P2P bitcoin exchange, has announced its decision to shut down operations. It posted the news on its website, saying that registrations for new customers will be suspended as of February 9, 2023, and buying and selling will be stopped from February 16. After the suspension, customers will be limited to withdrawing bitcoins within a 12-month period.
“Localbitcoins was originally established to bring bitcoin everywhere and drive global financial inclusion,” the company said Thursday. “We have honored that mission for more than 10 years and we are proud of what we have accomplished together with all of you, our loyal community.” The Bitcoin exchange added:
Unfortunately, we have come to the sad conclusion that despite all our efforts to overcome the challenges of the crypto winter, we are unable to continue offering our bitcoin buying and selling service.
In its early years, Localbitcoins was the most popular exchange for peer-to–peer transactions around the world. However, centralized crypto-exchanges eventually took over. Localbitcoins was more successful in countries without centralized buying and/or selling options.
In 2019, the peer-to–peer exchange faced additional challenges as it tried to adhere to Know Your Customer (KYC) laws. Additionally, Localbitcoins’ focus on in-person transactions made it less appealing to peer-to-peer traders.
In 2021, during the cryptocurrency bull market and digital currency value resurgence, Localbitcoins launched a mobile app for Android. However, the platform has not yet recovered to its 2017 levels. Even during the 2021 bull market, a steady decline in volume was observed. Currently, the volume of Localbitcoins is roughly the same as it was during the 2015 bear market. The first week of February 2023 saw a slight increase in trading volume, with 6.56 Million BTC being traded over a period of seven days.
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