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Localbitcoins Forced Account Holiday

LocalBitcoins Suspend Thousands of Users in Latest Policy



Localbitcoins has been my go to place to sell and buy cryptocurrency place since a very long time. I have always advocated the use of Localbitcoins as it offers Escrow : Safest Way to Buy and Sell Cryptocurrency. But this article brings a bad news for some users, although its not another Localbitcoins scam this time its a change in policy.

Localbitcoins Fathil1 suspended angry

People are questioning and wondering what more info localbitcoins would require out of their users after they have already given them passport,driving permit, proof of residence , address,ID etc

LocalBitcoins Alternative

For the lazy people who are in a hurry and want to get to some alternative peer to peer platforms with same level of user base are in luck. I will share a few platforms which will let you do what Localbitcoins allowed us to do so for so many years. Some famous localbitcoins alternative platforms are :

  • Remitano – Remitano provides escrowed P2P Bitcoin marketplace where people buy and sell Bitcoin easily and safely with notable simple UI, friendly online customer support 24/7 and lowest fee compared with major players on the market. Our team is comprised mostly by banking professionals with extensive experience in financial products, E-currencies, Payment System and Agile Software Development, and others.
  • PaxFul – A global peer to peer payment logistics platform. Paxful is PayPal + Uber and the peoples Wall Street. Paxful provides escrow and has a strong userbase.

Localbitcoins Account Suspended

If you noticed that your localbitcoins account has been suspended and you are being redirected to the verification page while you have already completed the verification of Tier 1 , 2 or 3. The issue is not with your account but the issue is with a latest policy which Localbitcoins has decided to follow based on EU Commission.

Failure to Withdraw Bitcoin from Localbitcoins
Failure to Withdraw Bitcoing from your own Wallet. Users are shown with a verification status message even if they are Tier 3 verified.

EU Commission Due Diligence Countries Suspended on LocalBitcoins

The following message is being shown to users who got their accounts abruptly suspended

Customers residing or otherwise located in the following countries are required to have an enhanced due diligence process. The countries are defined by EU commission: Afghanistan, American Samoa, The Bahamas, Botswana, Democratic People‚Äôs Republic of Korea, Ethiopia, Ghana, Guam, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands, Yemen.

What Next If My Country is Listed ?

If your country is mentioned it would mean that you can not trade on localbitcoins, you can not make new ads or buy from already listed ads. It also mean that you can not withdraw your held bitcoin from the wallet.

If you want to withdraw your bitcoins you will have to delete your Localbitcoins account. It might not be a big thing if your account is new and have less trades but for many bigger traders it isn’t the best option aswell. While they are stuck with lots of bitcoin stuck in their wallets and withdrawing them means losing their old accounts which have credibility.

Many users are also reporting that they are getting the same message as shared above while their country is not mentioned in the list of countries, there are chances that the issue will be fixed for them sooner.

Can I Ever Trade on Localbitcoins ?

As of now there is no timeline on when such accounts will be reinstated and trading will be allowed for the countries mentioned above.

The process to activate the account will be introduced in the near future

Localbitcoins statement regarding when such accounts will be activated

As stated above the website has not provided any specifics details about when the process will be initiated although I think it can take up a few months as it requires localbitcoins to address various legal aspects of enabling access for such countries.

Update: Localbitcoins has resumed services for countries where they banned users earlier with enforced Tier 3 Verification

LocalBitcoins Team Response

The first thing I did was to reach out to Localbitcoins team and ask them about whats going on and what they have planned for future. Initially I asked that what is way forward for all the users who got their account banned and the answer was

Unfortunately, your account will remain suspended for now. Please be kind and wait for the process of activation to be completed. If you are not willing to wait for your account to be activated and would like to withdraw your bitcoins, you can request account deletion We are very sorry for the inconvenience!

This was something we all know already as I have already shared it in this article, so I asked them specific questions:

  • Question 1 : As its a regulation based suspension and not because of user fault, can there be a one time provision that we maybe allowed to withdraw our funds for 1 time. That way users will not have to delete their old account which has might have gained credibility over the years, something which is very important for traders.
  • Question 2 : Can we get a rough ETA as to how much it may take for a policy to be drawn for countries which got their accounts suspended.
Must Read:  Coinbase Secretly Allows Free Paypal Withdrawals

Localbitcoins team replied to these queries with the following :

  • Answer 1 : it is currently not possible to withdraw BTC by any other means except account deletion.
  • Answer 2 : We are currently not able to provide the ETA for the activation process, unfortunately.

It turns out that people will have to wait for now with no ETA in sight. Traders with old accounts will try to wait for some verification so their accounts can be used while many might need to withdraw resulting in account deletion.

Exit Scam – Crazy Theory

Again I personally use LBC and it has proved to be great for buyers and sellers, but let say the reason for not informing all the users prior to implementing the policy was something else. What if LBC could not process all the bitcoin withdrawal had they informed the users because everyone would atleast empty their wallets when they know that their account will be suspended with withdrawals disabled. To avoid that outflow of bitcoin, localbitcoins simply thought to suspend the users and deal with the withdrawals on a slower pace. Where they are keeping BTC ? Do they need a reaction time to be able to provide our bitcoin ? One reddit user even jokingly called it an exit scam. It’s just a Crazy Theory, or is it ?

LocalBitcoins is a Scam

Localbitcoin is a scam‘ is a statement which many have made but I would strongly oppose it. Localbitcoins is a very credible and old service which is very much functional and whatever reasons the website has for this bulk user suspension can be justified and if not justified I am sure they will try to fix this issue. Therefore it doesn’t make sense to call local bitcoin a scam.

Conclusion

Localbitcoins is one of the best websites but this particular issue shows that they do not care much about their users. As they could have given a deadline to users that a new policy will be introduced and what all will happen in that policy. Introducing a policy which suspends a thousand users from trading and from withdrawing their bitcoin is not a good thing. But hopefully they will introduce a procedure that the users from listed countries can trade and take full advantage of Localbitcoins. Users have also started showing their anger on reddit /r/localbitcoins about issues which I have highlighted in this article.

What is your take on Localbitcoins act ? and have you suffered because of this particular action of theirs ?

Do RT the tweet below so Localbitcoins understand the gravity of their decision and is forced to either revert the action or implement a working method for all those suspended users.



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