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LocalBitcoins are Suspending Users’ Accounts Worldwide Without Any Announcements - Binaryx

LocalBitcoins are Suspending Users’ Accounts Worldwide Without Any Announcements

LocalBitcoins – Account Suspension Without Prior Announcement Amid Users’ Reports

Namely, traders from Africa, the Middle East, and Asia faced the unexpected suspension. The Finnish crypto exchange made such actions without warning and notifying its users. But the reason LocalBitcoins nevertheless voiced – “an expanded process of due diligence.”

Only on January 28, and this is almost a week after the first case of account freezing, LocalBitcoins tweeted that at the moment, the planned technical work is underway on the site. But, it is worth noting that in their statement, it was said about the duration of this procedure, and they wrote about one hour.

According to the report, the first complaints began to come from LocalBitcoins users in countries such as Afghanistan, Iraq, Nigeria, Syria, and Pakistan. The complaint was that users could not withdraw their bitcoins without deleting their accounts.

LocalBitcoins – New AML Law May be a Reason of Suspension

However, such a restriction on access to a personal account can be explained quite logically. The reason for all this, perhaps, is the new EU Anti-Money Laundering Act (AML), which is known as the 5th Anti-Money Laundering Directive (5AMLD).

LocalBitcoins – Users Face Delay by Accessing Own Assets

Now, to regain access to their digital assets, users are forced to send a request to delete the account to the support service. This procedure is expected to drag on for two weeks. In addition, some affected users claim that their accounts were banned for no reason. There are other cases with a “temporary lock.” One of the users of LocalBitcoins wrote on Reddit that despite his work with the platform for three years and verification of his account, he nevertheless fell into a wave of blocking. All this is also overshadowed by the fact that the user from Liavan did not receive any letters to the mail with a warning or explanation, as, for example, to some other users. 

Such reckless action on the part of the crypto exchange has harmed many miners. Even taking into account the situation described above, we are aware that Bitcoin is of great importance in Lebanon amid the growing economic crisis in the country.

LocalBitcoins – Significant trading volume reduction in one year

Without a doubt, we call LocalBitcoins the best-selling cryptocurrency exchange, if only because starting its activity back in 2012, the company allowed protecting P2P transactions directly between the seller and the client and without the participation of any third party.

But the company’s negative policy regarding the ability for users to perform local cash trading in June 2019 significantly reduced the trading volume on the platform. Further, the company’s policy only tightened, which means that the global volume of trade in cryptocurrency assets continued to decline, and fell by more than 50% in 2020.

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