LocalBitcoins Review by professional Forex trading experts the “ForexSQ” FX trading team, Finding out everything you need to know about the broker in this LocalBitcoins Review.
LocalBitcoins is a major global peer-2-peer cryptocurrency exchange where users can trade cryptocurrencies for fiat currencies and vice versa between each other. There are several similar platforms like Remitano and Bisq who offer decentralized P2P cryptocurrency trading.
It is worth noting, however, that such type of trading can be somewhat riskier, as the clients can be scammers and cause significant problems for an honest trader. Similarly to Remitano, for example, Local Bitcoins also offers an escrow service, which temporarily holds the coins, until the payment is confirmed. Nevertheless, we have come across numerous complaints of problems with fraudulent payments and subsequent having to deal with Local Bitcoins’ customer service, which is generally described as “rude” and “inefficient”.
As the name suggests, at LocalBitcoins can be traded only Bitcoins.
The platform provides two types of trades: Online trades and Local trades. The Online trades, as the name suggests, happen entirely online through LocalBitcoins’ platform and provide automatic escrow protection for the buyer. Most of trades on LocalBitcoins are online trades. The Local trades, on the other hand, are meant to be carried out in person where the buyer and seller meet up face to face and carry out the transaction.
If you are interested in leveraged trading in cryptocurrencies, there are platforms like Kraken, Quoinex, Bitfinex, Okex, etc. who offer such service.
Additionally, there is an ever growing number of forex brokers who offer leveraged trading on CFDs on some of the most popular cryptocurrencies or other investment instruments involving them.
The Company. Security of Funds
Local Bitcoins is a Finnish-based cryptocurrency exchange. It is not regulated and does not need to be, as the European stance on digital tokens is still a bit undefined. The EU Commission has announced its plans to introduce some regulation on cryptocurrencies, but more with regard to their use for financing terrorism and other types of crimes. Under pending changes to various EU directives, the providers of exchange services and e-wallets, will be required to implement know-your-customer and anti money laundering procedures and to collect process and record personal data, and sometimes to share such data with public authorities (such as FIUs) or with private entities within the same group.
Considering the cumbersome and slow bureaucratic process in the EU, most likely those measures are approved and implemented in years.
LocalBitcoins has been in business since 2012 and has become one of the larges P2P bitcoin exchanges. As we have already mentioned, LocalBitcoins provides an escrow service, which ensures that the bitcoin buyer is not scammed. “This means that if the seller runs away with your money and does not release your Bitcoins LocalBitcoins.com support can release the Bitcoins to you from escrow”, explains the platform in the FAQ section. This, however, is valid only for Online trades. For Local trades the service is not enabled by default and the platform advises the clients not to use online payment services in such cases.
LocalBitcoins offers services globally, but not without problems. Last autumn Russia has blacklisted the site and the electronic communications megaregulator – Roskomnadzor – has blocked the local access to its website. The court decision was based on Article 15.1 of the Federal law on information, information technologies and protection of information. It provides for banning access to internet sites with child pornography, information about production and obtaining of narcotics, information how to commit suicide, information about gambling and lotteries forbidden in Russia and “illegal information on the internet”. Days later LocalBitcoins launched a mirror site for its Russian clients.
More recently, a Michigan man has been charged with running an unlicensed money transmitting business after selling nearly $150,000 in bitcoin online. He allegedly ran an exchange through LocalBitcoins and has sold bitcoin as part of a business venture for approximately two years, at a volume that would make him subject to federal anti-money laundering regulations.
As per its own site, LocalBitcoins employs the usual security features like two-factor verification, login guard and some additional features.
Generally, LocalBitcoins does not necessarily require ID verification for trades, but certain types of payments must be verified. For high risk trades, ID verification is also required. Additionally, LocalBitcoins notes that most traders actually require verification of the other party. Plus, a verified account gives access to most advertised orders and better prices.
LocalBitcoins’ trading platform is somewhat different than that of the majority of the spot exchanges, for the simple reason that it is a different type of platform. The main feature of the platform shows the places (city, country and distance) where someone has placed a buy or sell order. There is also a price quote, method of payment (bank transfer, cash, etc.) and size of the order (in fiat currency).
We could not find an order book, but this most likely is because of the nature of the trading platform itself.
Methods of payment
LocalBitcoins supports a fairly good selection of payment methods in fiat currencies, depending on the personal preferences of the traders and the nature of the platform as a P2P exchange. There is the option to pay in cash (a very rare option, but could be handy for face to face interactions), national bank transfer, European bank transfer (SEPA), the wire transfer services MoneyGram and Western Union, cash by mail, cash deposit, credit card, MoneyBookers, Neteller, Skrill, Paypal and even Amazon Gift Card. Of course, some payment methods come with additional commissions and fees.
This is perhaps the widest and most convenient payment method list of a cryptoexchange we have come across so far. Most exchanges accept bank transfers and some additionally accept payments with debit/credit cards.
In addition to fiat currencies, LocalBitcoins supports payments in Bitcoin, through its proprietary bitcoin wallet.
LocalBitcoins is among the oldest and largest P2P cryptocurrency exchanges and those are perhaps its major advantages, in addition to the large number of payment methods for fiat currencies.
The main risk is that a trader is dealing directly with other traders and one may come across a scammer. LocalBitcoins does take precautions against fraudulent activities, such as holding the bitcoins in escrow until the payment is confirmed, but there is always the risk of chargeback and one remaining without bitcoins and fiat money. This is why most traders require user verification with a government ID and the platform advises to avoid high risk payment methods like PayPal and credit cards.
Obviously every now and again LocalBitcoins comes under the scrutiny of various national authorities across the world, but in fact its activities are not illegal. The problem is that they are not regulated, either, and its clients are left at the safety measures of the platform itself and the honesty of the traders, so we’d say using its services is somewhat riskier than that of centralized spot trading platforms.
The trading fees are not very low, either. There are other exchanges who charge a fraction of the commission charged by LocalBitcoins.
LocalBitcoins Review Conclusion
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