LocalBitcoins, a peer-to-peer (P2P) bitcoin trading platform located in Finland, announced that it would cease operations after more than a decade of serving its users.

On February 9, LocalBitcoins made the formal announcement that the company will be discontinuing its services, citing challenging market circumstances caused by the prolonged bitcoin winter.

LocalBitcoins urged all of its clients to remove their cryptocurrency holdings from the site and instructed them to begin the process of deleting Bitcoin (BTC) from the wallet associated with their LocalBitcoins account. According to the notification, clients have the ability to withdraw their cryptocurrency assets from their LocalBitcoins accounts for a period of one year. The company made the following observation: “However, of course, we recommend that you continue to withdraw earlier.”

In accordance with the time frame for the shutdown, starting February 9, LocalBitcoins will stop instantly accepting new registrations. On February 16, all transactions will stop, and after that date, users will only be able to log into their wallets to withdraw money from their accounts.

The sudden shutdown of LocalBitcoins comes shortly after the United States Financial Crimes Enforcement Network named the site as one of the top Bitcoin senders for the Russia-connected Bitzlato exchange. Authorities in the United States have launched a major enforcement action against Bitzlato, accusing the company of engaging in money laundering and allegedly helping to evade sanctions imposed on Russia.

Since October 2022, when we stopped providing Russian user accounts and Russian resident user accounts, our records show that there have been almost no transactions between LocalBitcoins and BitZlato. This information is based on data we have collected.

Blomberg further emphasized that LocalBitcoins complied with both Know Your Customer and Anti-Money Laundering requirements strictly and that the company has been regulated by the Finnish Financial Supervisory Authority since 2019.

As noted in the past, Russia was at one time one of the most important markets for LocalBitcoins. As of June 2020, the country had the highest volume of Bitcoin transactions on the site. According to statistics provided by Coin Dance, total trading volumes on LocalBitcoins have been steadily declining after hitting an all-time high in December 2017.

Since February 2021, when they fell below 1000 BTC for the first time, the weekly Bitcoin trading volumes on LocalBitcoins have never recovered to their previous levels. The most recent weekly BTC trading volume reported on LocalBitcoins was 283 BTC, which equates to around $6 million. According to statistics provided by CoinGecko, large cryptocurrency exchanges like Coinbase transact a total of $282 million worth of digital currency daily.