LocalBitcoins Suspends Customers Accounts In Several Countries

LocalBitcoins has apparently disabled accounts from several African countries and put out a notice to traders.

January 27, 2020, | AtoZ Markets – LocalBitcoins, a peer-to-peer crypto exchange has reportedly begun to suspend accounts of long-term customers without official notifications.

LocalBitcoins deactivates users Bitcoins accounts

According to Forbes, traders from at least three regions, including Asia, Africa, and the Middle East, have their accounts suspended.

LocalBitcoins customers in countries like Nigeria, Iraq, Afghanistan, Pakistan, and Syria received messages from the exchange platform. According to the email, their accounts ‘will remain suspended’ and they need to delete it in order to withdraw their Bitcoins. However, some users said they weren’t able to access their funds.

LocalBitcoins Suspends Customers Accounts In Several Countries

One Nigerian user who manages a three-year-old account told Forbes:

One of my customers was due to travel out of the country and had to sell some of his bitcoin to be able to go only to notice on his way to the airport that he cannot even access his funds.

A source familiar with the matter said that his customer’s account had been shut down on Monday. According to him, there was no warning or notification that it might be reactivated. Moreover, as per the messages obtained by AtoZ Markets, the crypto exchange requires users in specific countries to pass through an “enhanced due diligence process.” However, no further details came out on what specifically that process is about.

As you may know, some of these targeted countries have been struggling with civil wars or economic problems. In 2019, LocalBitcoins shut down accounts of users from Venezuela.

Is AMLD5 the reason for the abrupt accounts suspension?

Though not confirmed, some onlookers hinted that the suspensions might be related to the  Fifth European Anti-Money Laundering Directive (AMLD5), which came into force on January 10.

 The new rules require crypto exchanges and custodial service providers to register with their local regulators. They are also required to demonstrate compliance with thoroughgoing know-your-customer (KYC) and anti-money laundering AML procedures.

Related: How Will The New AMLD5 Affect European Crypto Exchanges?

It is worthy of note that LocalBitcoins was established as an anonymous platform. However, the platform changed its priority after years of operations. In April 2018, it made it mandatory for high volume traders to disclose their identity and halted anonymous trading.

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