LocalBitcoin Loses Traders After Cash Trading Ban: 'Not Very Local'

On June 1, Finnish peer-to-peer bitcoin trading platform LocalBitcoins quietly removed in-person cash trading from its service.

As per the accompanying statement, LocalBitcoins had to renounce local cash trading to "Adapt to the current regulatory environment."

Four different p2p platforms approached by Cointelegraph confirmed that they have seen an increase in local cash trades ads on their platforms since LocalBitcoins removed the option.

"It is not really popular, but we've seen an influx of traders who used to trade on Localbitcoins coming to our Telegram group and actively discussing various options on how to trade cash and suggesting improvements, which we think is great, helps us improve the workflow and we're expecting to see more cash trades soon."

"Less than 2% of the trades on Bisq so far in June have been cash trades," the spokesperson specified.

"Cash exchanges made up 0.6% of LocalEthereum's volume last month. Since the announcement, cash has climbed to 16% of volume - a 26-fold hike. We've never seen this level of activity for cash before."

A United Kingdom-based trader, who has posted a similar advertisement, told Cointelegraph, "I tried to post again and it didn't work so we tried cash deposit but that's also kind of useless now as people want to use cash deposit service".

LocalBitcoins declined to comment on how popular cash trading was on their platform prior to the removal.

Now that LocalBitcoins had to abandon the cash in-person trading, its rival p2p platforms are picking up a fraction of its traders.

The Hodl Hodl spokesperson agreed that it is possible that all p2p platforms will be forced to ban cash trading in the future, but argued that, since its exchange is noncustodial and doesn't hold any bitcoins or fiat money, it might have a better chance of being cleared to operate.