The cryptocurrency industry is bitterly cold, and the wave of closures continues to spread. LocalBitcoins, a Bitcoin exchange operating in a P2P mode, is another victim of this wave of bear market. Decided to shut down a platform that has been in operation for more than 10 years this month.
LocalBitcoins said in a statement : “While we have worked hard to overcome the challenges of the long crypto winter, unfortunately, LocalBitcoins can no longer continue to provide bitcoin trading services.”
LocalBitcoins has suspended new user registrations since February 9th, and will suspend trading and wallet services on February 16th. After that, assets can still be withdrawn, but the exchange reminds users that they must withdraw their accounts within 12 months. The remaining assets in the withdrawal are emptied.
LocalBitcoins, located in Helsinki, is one of the longest-running exchanges. It was officially launched in June 2012, allowing Bitcoin to play its role as a “global P2P electronic cash system” in unstable countries. It has become a huge opportunity to grow the cryptocurrency community.
In 2017, the United States began to impose sanctions on the Venezuelan government . International banks were unable to conduct normal business with Venezuelan banks. Companies such as MoneyGram and Transferwise stopped providing services to the country, making it impossible for local people to receive foreign remittances. LocalBitcoins has filled this gap by providing a reliable and fast channel to transfer funds , giving hope to isolated Venezuelans.
Facing the problems of inflation and currency devaluation, many Venezuelans will buy Bitcoin through LocalBitcoins to spread risk and use it as a substitute for US dollars, and only sell Bitcoin when they need cash. Additionally, the platform allows locals to purchase international products using Bitcoin.
LocalBitcoins used to be the most commonly used Bitcoin exchange for Venezuelans. However, Aníbal Garrido, a local cryptocurrency advocate, believes that the closure of the platform will have little impact on the Venezuelan market, because the trading volume of LocalBitcoins has dropped sharply since 2018 and is now very small . people are using the platform.
According to data from CoinDance, LocalBitcoins has averaged weekly trading volumes of between $5 million and $7 million over the past four months, a far cry from 2017, when it topped $100 million for several weeks.
