OTC Cash Trades: LocalBitcoins Out, Local.Bitcoin In
Bitcoin Cash (BCH) has become the latest to join the over the counter (OTC) fold as popular platform, LocalBitcoins, stopped cash-based Bitcoin (BTC) transactions after nine years. The Roger Ver-led BCH this week launched local.bitcoin – which is reported to have been in the works for months for the OTC trading of BCH, a fork of BTC. Its launch on June 4 is also said to be in honour of the 30th anniversary of the Tiananmen Square protests.
The new platform has since its emergence been getting attention from enthusiasts who have registered accounts from many countries including China, India and Philippine especially for its non-KYC procedure.
Note on the removal of Local Cash Ads pic.twitter.com/ue2YBYErTY
— LocalBitcoins.com (@LocalBitcoins) June 4, 2019
The private peer-to-peer trading platform for the BCH community launched to the public as Localbitcoins reportedly fell into a regulatory abyss. The Finland-based marketplace stopped responding to its users’ queries over what is suggested could be ongoing legal issues. They have disabled the platform’s community forums, changed verification patterns as well as part of their policies all with little or no explanation (last blog post in March). As this is coming at a time when crypto-related investigations are being launched in the US and talks about regulation intensify even in Europe, there is a less chance that the Localbitcoins cash-based BTC trades will come back.
Yet, Localbitcoins is still considered to have the biggest and the most listings and top number of users online. The halt in BTC for cash trades may not change the site’s claim to have users in 248 countries and over 7500 cities immediately. Ads for trade offers may have been removed without notice but it does not indicate that users are leaving – at least yet – as many users have built their reputation over the years and may wish to maintain it.
However, despite there is no evidence to suggest users are moving away from LocalBitcoins yet, users seeking to use a similar service with less infringement cannot be stopped from heading elsewhere. LocalBitcoins is a business seeking profit. They have to abide by the legal advice they get regarding users verification and other attendant issues. The business is not meant to protect users from the government but to ensure they get a working platform for users to match trades with ease.
Hence, users are free to try out a different platform. With its huge dominance in the market, the latest development gives the likes of Local.Bitcoin a competitive edge – though only for BCH trades – to grow in the top rank of the industry. Other rising OTC platforms include Paxful, Bisq and Hodlhodl.
It took LocalBitcoins three days to acknowledge they had deleted thousands of BTC for cash trade ads. When they did via a tweet on June 4, it correlates with a ~6% drop in the price of Bitcoin from $8500.