On June 1, the veteran peer-to-peer bitcoin exchange Localbitcoins shocked the crypto community by removing all in-person cash trading options. Users reported that pending fiat cash orders were abruptly canceled, leaving those who prefer face-to-face transactions stranded. Many expressed frustration: “I logged in and found my in-person sell offers were all deleted. The ‘add new’ prompt now has no local options, only online ones—this defeats the purpose of the name ‘Local’.”
Why Did Localbitcoins Drop Cash Trades?
Localbitcoins has not officially explained the change, but it follows recent KYC enhancements and a ban on serving Iranian users. Some speculate the move aims at stricter compliance. However, the sudden cancellation without warning angered veteran traders who relied on cash liquidity in emerging markets.
User Exodus Sparks Competition
Social media erupted as traders sought new venues. Ray Youseff, founder of rival P2P platform Paxful, tweeted: “Localbitcoins is now Remote Bitcoins—they took down all cash offers and refugees are flooding to Paxful VIP support. We won’t let you down—cash is still king in the emerging world.” Paxful reported a sharp uptick in registrations within hours. Other platforms also scrambled to attract displaced users.
Local.Bitcoin.com Launches with Cash-Friendly Options
Coincidentally, Local.Bitcoin.com—a non-custodial P2P marketplace focused on Bitcoin Cash (BCH)—announced its launch for June 4. The platform explicitly supports in-person cash trades alongside numerous online payment methods. It employs blind escrow, locking funds on-chain so that even Bitcoin.com cannot access them; only the two parties can settle. Users can pre-register, create sell orders, and earn 20% lifetime referral fees from friends they invite. Within 48 hours, thousands signed up.
Security Concerns Remain
Without escrow services, some traders may resort to unsafe methods like Craigslist, risking theft. Experts urge using escrow-enabled P2P exchanges for secure cash deals. Localbitcoins’ move, while disruptive, is accelerating the shift toward safer, non-custodial P2P ecosystems. The exchange now only offers remote transfers such as bank wire and online payments. Whether cash trades will ever return remains unclear.