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|Founded||June 2012 in Helsinki, Finland|
|Nicholas Kangas (CEO until 10/2017)|
Jeremias Kangas (CEO, Founder)
LocalBitcoins is a bitcoin startup company based in Helsinki, Finland. Its service facilitates over-the-counter trading of local currency for bitcoins. 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 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 1,400–3,000 bitcoins per day.
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 the beginning of 2013. In April 2014, the company announced that it would begin mass-producing low cost bitcoin ATMs. In the same month, LocalBitcoins suffered from a security breach, when 30 bitcoins (then worth US$15k) were stolen from its users.
In December 2014, the Federal Financial Supervisory Authority of Germany contacted LocalBitcoins about licensing issues, and LocalBitcoins ceased to operate in Germany. LocalBitcoins said that it had about 8000 people actively using the service from Germany at the time. In February 2014, two men from Florida were charged with violating state money laundering laws for using LocalBitcoins.
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.
LocalBitcoins trader Theresa Lynn Tetley, better known as the “Bitcoin Maven,” has been sentenced to 12 months and a day in prison, a $20,000 fine, and three years supervision after release for laundering bitcoin as proceeds of narcotics sales and for her role in running an illegal bitcoin for cash exchange, according to the U.S. Attorney’s Office for the Central District of California. She was also ordered to give up the proceeds of her illegal activity, including $292,264 in cash, 25 gold bars, and 40 bitcoins.
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. 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.
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. LocalBitcoins posted instructions for users on how to bypass the access restrictions.
In September 2017, LocalBitcoins announced that it will be compensating the users for their 'Bcash Holdings" and also stated that it wouldn't be supporting users who were held with bitcoin balances at the time of the fork. On 7 December 2017, new user registration was briefly paused, as the site experienced record traffic.
In 2018, LocalBitcoins headed the list of best financially performing companies in Finland arranged by the local specialised publication Kauppalehti. CoinDesk published in April of the same year, an article stating that LocalBitcoins counted with four million registered users, and had a 40% increase in registrations during the past semester.
In January 2019, hackers stole bitcoin worth $28,200 from users' LocalBitcoins accounts.
The website offers a service to facilitate the locating of other Bitcoin users can meet others for person to person trading of bitcoin.:23 The site is suggested for casual traders seeking more privacy.:207 The site uses an escrow system, and the transfer of bitcoin is made after funds are received in the sellers account.:221