LocalBitcoins starts asking for ID. LocalBitcoins alternatives without KYC

The party is over: LocalBitcoins seems to no longer be interested in anonymous p2p Bitcoin trading.

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A reddit user has reported that he was asked for an ID by the P2P Bitcoin exchange LocalBitcoins. The message says that the user has a “high transaction volume” and therefore has to provide an ID.

The company blog has no announcements related to LocalBitcoins going full KYC/AML. It’s hard to speculate what exactly is happening – it’s either a change they are implementing platform-wide, or perhaps with that very user only (e.g. law enforcement has asked LocalBitcoins to provide info on the user).

In any case, LocalBitcoins was popular because it’s always been an anonymous way to buy and sell Bitcoin. No matter what happens next (i.e. whether LBC implement the full KYC rules), the dangerous precedent has been set: LocalBitcoins can ask and are asking for an ID.

People looking to buy and sell Bitcoin anonymously or at least without sending any ID scans really need to get familiar with LocalBitcoins alternatives. Below is a list of sites like LocalBitcoins with explanations of how they work and what to expect with them:

1. Paxful.

Paxful is the same principle peer-to-peer marketplace that matches buyers with sellers and provides an escrow mechanism protecting trasnferred Bitcoin. The main point of Paxful is the diversity of the payment methods it accepts – basically any way to pay that’s popular in your country will be accepted by sellers there. All kinds of gift cards, mobile payments, bank transfers, cash – everything goes at Paxful. There are some security tips that are necessary to avoid fraud (there are scammers on p2p marketplaces, it’s inevitable but easy not to fall for) – some of them are listed in this Paxful review.

All in all if you’re used to LocalBitcoins then Paxful will seem very similar. Sign up here.

2. HodlHodl

HodlHodl is an interesting and new p2p platform that we wrote about recently. It works just the same way as LBC or Paxful, except it does not store your Bitcoin for you at any point. The coins are sent to multisig wallets that require that one side of the trade confirmes they’ve received fiat money.

Here it is explained by HodlHodl representative:

For now HodlHodl has little volume but that should be changing really soon, especially considering the platform will charge NO FEES until summer. The situation with LocalBitcoins asking for the ID seems god-sent for HodlHodl.

Sign up to HodlHodl


3. Bisq.network

Bisk Network is a decentralized coin exchange that requires a bit of a learning curve. It’s a desktop software you have to download & install onto your computer, but you can find all the instructions here (works on Windows, Mac and Linux). Give it a shot if you consider yourself technical and love challenges.

4. TrustedCoinTrades.Com

This platform has been popular in some circles but it’s not well-known yet. The way it works is assigns trust levels to users (gold, silver, and bronze) and lets them use dual escrow. There are plenty of accepted payement methods too:

Trade with cash, checks, bank transfers and even do loans. All this is possible with trusted trade partners. Gold members are backed with a $200.00 Safety Guarantee. Additionally, trades are secured by Bitcoin, Bitcoin Cash or Litecoin in dual escrow.

Sign up here.

As we wrote in the 2018 Bitcoin predictions post, decentralized exchanges will be the thing that defines Bitcoin further. Actors rise and fall, and if LocalBitcoins goes full KYC/AML, the niche for anonymous Bitcoin trading will likely see more and more interesting innovation.

IMPORTANT: with all the LocalBitcoins customers that wish to remain anonymous looking for a new place to buy and sell Bitcoin, there will be A LOT OF SCAMS. Several scams like “furcoins” and “liviacoins” operate already, and many more will come. DO not use untested exchanges with large BTC amounts!

Update June 25, 2018:
Bitpanda just presented a way to buy Bitcoin and other crypto with cash in EU, check it out – it’re redeemable without any IDs.
1 Comment
  1. Alex says

    Thanks for the sharing the vigilance! Please keep up the good work!

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