LocalBitcoins

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LocalBitcoins
Founded June 2012[1] in Helsinki, Finland[2]
Key people
Nicholas Kangas (CEO)[3]
Jeremias Kangas (Founder)[4]
Website Official website

LocalBitcoins is a bitcoin startup company based in Helsinki, Finland. Its service facilitates over-the-counter trading of local currency for bitcoins.[5] Users post advertisements on the website, where they state exchange rates and payment methods for buying or selling bitcoins. Other users reply to these advertisements and agree to meet the person to buy bitcoins with cash[6] or pay with online banking. LocalBitcoins has a reputation and feedback mechanism for users and an escrow and conflict-resolution service. As of December 2013, LocalBitcoins has around 110,000 active traders with a trade volume of 1400–3000 bitcoins per day.[7]

History[edit]

LocalBitcoins was founded in June 2012 by Jeremias Kangas. He implemented an escrow system for the marketplace by the end of 2012. The website started generating revenue by early 2013.[4]

In April 2014, the company announced that it would begin mass-producing low-cost bitcoin ATMs.[8] In the same month, LocalBitcoins suffered from a security breach, when 30 bitcoins (then worth US$15k) were stolen from its users.[9]

In December 2014, the Federal Financial Supervisory Authority of Germany contacted LocalBitcoins about licensing issues, and LocalBitcoins ceased to operate in Germany.[10] LocalBitcoins said that it had about 8000 people actively using the service from Germany at the time.[10]

In February 2014, two men from Florida were charged with violating state money laundering laws for using LocalBitcoins.[11] In April 2016, another two men from Louisiana, United States, a former chiropractor and his son, pleaded guilty to funneling money through an unlawful Bitcoin financial scheme. The men were using LocalBitcoins to advertise their services.[12]

In August 2015, LocalBitcoins ceased to operate in New York state because sellers would have to purchase a BitLicense from the New York State Department of Financial Services to remain in compliance with local financial regulations.[13]

In August 2016, LocalBitcoins said that 1.35 million people from 249 countries were using its platform, and that the weekly volume of transactions was US$14 million.[3]

In September 2016, access from Russia to LocalBitcoins was blocked by Roskomnadzor, the executive agency for telecommunications in Russia, after the finance ministry proposed criminalising the use of bitcoin.[14][15] LocalBitcoins posted instructions for users on how to bypass the access restrictions.[14][16]

References[edit]

  1. ^ Knibbs, Kate (2015-02-05). "Meet the Street Dealers Who Peddle Bitcoin". Gizmodo. Archived from the original on 2016-12-30. Retrieved 2016-12-30. 
  2. ^ "LocalBitcoins | CrunchBase Profile". CrunchBase. Retrieved 2014-02-19. 
  3. ^ a b Leung, Angus (2016-09-16). "Russia Blocks Finnish Bitcoin Exchange, Reasons Not Explained". CoinTelegraph. Archived from the original on 2017-01-03. Retrieved 2017-01-03. 
  4. ^ a b Pineda, Marco (2014-07-14). "Exclusive Interview With Founder of LocalBitcoins.com - Jeremias Kangas". Bitcoinist. Archived from the original on 2017-01-03. Retrieved 2017-01-03. 
  5. ^ McMillan, Robert (2013-03-28). "Why the Only Real Way to Buy Bitcoins Is on the Streets | Wired Enterprise". Wired. Condé Nast. Retrieved 2014-02-19. 
  6. ^ Murphy, Kate (July 31, 2013). "Virtual Currency Gains Ground in Actual World". New York Times. Retrieved February 20, 2014. 
  7. ^ Lemarchand, Rafael (2013-12-06). "Helsinki's LocalBitcoins Hits Up To €3 Million A Day In Exchanges". ArcticStartup. Retrieved 2014-02-19. 
  8. ^ Joon Ian Wong (2014-02-15). "LocalBitcoins Starts Manufacturing Low-Cost Bitcoin ATM". CoinDesk. Retrieved 2014-02-19. 
  9. ^ Berkman, Fran (2014-04-17). "LocalBitcoins exchange confirms security breach, stolen bitcoins". The Daily Dot. Archived from the original on 2016-12-30. Retrieved 2016-12-30. 
  10. ^ a b Rizzo, Pete (2014-12-10). "LocalBitcoins 'Exploring Options' After Service Halt in Germany". CoinDesk. Archived from the original on 2016-04-10. Retrieved 2017-01-03. 
  11. ^ "LocalBitcoins.com Targeted - Another Major Bitcoin Exchange May Be Under Threat". Business Insider. 2014-02-09. Retrieved 2014-02-19. 
  12. ^ Elliot Maras (2016-05-23). "Arrests And Prosecutions Reveal Big Vagaries In Bitcoin Selling Regulations". CryptoCoinsNews. Retrieved 2016-05-23. 
  13. ^ Young, Joseph (2015-08-25). "BitQuick and Local Bitcoins Terminate Service in NY due to BitLicense Compliance Costs". Bitcoin Magazine. Archived from the original on 2016-05-21. Retrieved 2017-01-03. 
  14. ^ a b Redman, Jamie (2016-09-12). "Russian Authorities Ban LocalBitcoins, Contradicting Previous Statements". Bitcoin.com. Saint Bitts. Archived from the original on 2016-09-12. Retrieved 2017-01-03. 
  15. ^ Das, Samburaj (2016-09-13). "Russia Blocks Access to Bitcoin P2P Exchange LocalBitcoins". CryptoCoinsNews. Archived from the original on 2016-09-14. 
  16. ^ Mizrahi, Avi (2016-09-13). "Russia's National Censor Blocks Access to LocalBitcoins. LocalBitcoins responded to the ban by instructing Russian users on how to bypass the censorship.". Finance Magnates. Archived from the original on 2016-12-30. Retrieved 2016-12-30. 

External links[edit]