The removal of this feature means that users can no longer sell or buy Bitcoin for cash, and will have to look to other platforms to make this exchange. This is considered the primary selling point of LocalBitcoins and the fact that users were subject to the change without prior notice has irked them even more.
The sudden removal was preceded by reports that LocalBitcoins, from Finland, would comply with the European Union’s new AML law, which focuses on cryptocurrencies. At the time, LocalBitcoins said in a company statement,
It is LocalBitcoins’ mission to bring Bitcoin everywhere and by being a reference in compliance, we also aim to promote trust, legitimacy and maturity in the Bitcoin ecosystem, while paving the way for it to become a more viable and widespread currency and combating criminal use of Bitcoin and its network. We are confident that the new measures will bring significant benefits to our user base, promoting a safer trading environment and acting proactively in preventing fraud.
Several other platforms offer in-person cash trades, including Dether, Paxful, and Mycelium, though users have reported that it can be difficult to find traders on these platforms. Paxful has reported an increase in sign-ups following the news.
LocalBitcoins is now Remote Bitcoins. They took down all their cash offers and the refugees are flooding to @paxful VIP support for all Cash vendors! We won’t let you down. Cash is still king in the emerging world!
— Ray Youssef (@raypaxful) June 1, 2019
Ethereum Alternative Arises
Cashing in on the news is LocalEthereum, which has brought the fees for cash trades down to 0% until July 1. A blog post on the subject states,
The global war on cash and privacy continues. LocalBitcoins suddenly removed all cash-in-person offers today, without any warning to its users. In response, we’ve reduced the trading fee on cash-in-person exchanges to 0%. From today until July 1st, you can buy or sell ETH with cash using LocalEthereum for free. Meeting in person is one of the oldest ways to exchange between crypto and fiat, and it remains one of the safest.