New KYC rules goes live on LocalBitcoins

A popular P2P platform for buying and selling cryptocurrencies has implemented new KYC (Know Your Customer) rules; however, the platform users have time until October 1 to complete the required procedures. 

The decision to tighten KYC/AML measures is related to new Finland legislation. It requires that the company comply with the rules applicable to the companies of the financial sector. The cryptocurrency community has been rather skeptical about new rules implemented by LocalBitcoins. Many traders are concerned that they will damage privacy.
     
According to the new rules, if an annual trading volume is less than 1000 euro, users will have to provide their full name, country of residence? email and phone number. Ef the volumes exceeds the limit, the platform operator will require the complete KYC procedure. It means that the users will have to submit a passport or any other ID document. A new system has four types of accounts with different trading volume limits.

Earlier the platform allowed users buying and selling Bitcoins in a safe and anonymous way. That was especially valuable for people from crisis-stricken countries like Venezuela, where people managed to survive in dire conditions partially thanks to Bitcoins. 

At the end of August, the platform extended the time for submitting the requested details. Users that will fail to do that, won’t be allowed to trade until they pass KYC procedure.

The recent developments raised questions about LocalBitcoins’s decentralization. 

“LocalBitcoins has never been a decentralized exchange because user funds have always been stored in their wallets,” Max Keidun from Hodl, Hodl,  said in the interview with Bitcoin Magazine.

This view is shared by a developer of a decentralized cryptocurrency exchange Bisq. He believes that the platform may be considered decentralized only in that it allows anyone to place orders.