The p2p exchange LocalBitcoins will suspend its operations in 13 jurisdictions of the United States from January 26, 2021. Users in those states will be able to continue trading with bitcoin (BTC) until then, but after that date all they can do is withdraw your funds from the platform.
Florida, Connecticut, Utah, Arkansas, Nevada, Nebraska, Mississippi, Iowa, District of Columbia, North Dakota, Minnesota, Kentucky, and Vermont are the states where the company has decided to suspend its services.
The news broke through a post on Reddit in the last hours of January 12. Shortly after its publication it was eliminated by its author. The next day, in statements to a media outlet, LocalBitcoins confirmed the veracity of the information. Also on its Twitter account the company explained that they are limiting operations in some states.
LocalBitcoins announced the suspension of its services in 13 jurisdictions in the United States. Source: Reddit / reddit.com
Taking into account that operations were already restricted in other states, according to the announcement, the platform can now be used – within the United States – only in Illinois, Kansas, Montana, New Hampshire, New Jersey, Pennsylvania, Tennessee, Texas , Virginia and Wisconsin.
“Bitcoin can’t be turned off” but exchanges can
The reasons that led to the cessation of operations in these United States jurisdictions are unknown and it is not known whether it will be a permanent or transitory situation. Presumably due to recent regulatory advances in that country on cryptocurrency exchanges. CriptoNoticias made a query to the company and at the end of this writing is awaiting comments, with more details on the matter.
As reported by CriptoNoticias, although it is a platform that facilitates transactions between people, LocalBitcoins complies with KYC policies (know your client) required by many state regulators worldwide. To operate there, it is necessary to provide proof of identity and verify contact details.
This was reinforced in December 2020 thanks to the partnership between LocalBitcoins and Onfido. Through this alliance, the p2p exchange now also verifies the identity of its users through a selfie and photo of some identification issued by the State, with prior confirmation of the data.
It thus differs from other similar platforms, such as HodlHodl, which allows commercial operations with BTC without the need to provide personal data to the company.
According to CoinDance, LocalBitcoins facilitated the purchase and sale of bitcoin for more than USD 46 billion between January 3 and 9, 2020. The use of this platform is enabled in Spain and in all Latin American countries, even in Ecuador and Bolivia, where there are restrictions for the use of cryptocurrencies.
“Bitcoin can’t be turned off,” LocalBitcoins founder Jeremias Kangas had rightly said in 2013. The same is not true for companies that facilitate access to cryptocurrency. These are subject to the advance of regulators who, on occasions, may decide to cancel their services.