Global Bitcoin exchange LocalBitcoins has recently stated that it will be suspending trading for more than a dozen US states starting as early as Jan. 26.
The announcement stated that only ten states will be able to continue using the exchange’s services. Those states include Illinois, Kansas, Montana, New Hampshire, New Jersey, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin.
LocalBitcoins Tightens Restrictions
LocalBitcoins.com will cease operating in all remaining states, aside from the aforementioned ten, by Spring 2021. It added that operations will be suspended sometime within the next two weeks for Florida, Connecticut, Utah, Arkansas, Nevada, Nebraska, Mississippi, Iowa, District of Columbia, North Dakota, Minnesota, Kentucky, and Vermont.
LocalBitcoins will be closing accounts two weeks after the Jan. 26 deadline and allowing customers to make one final withdrawal after that period.
The news was first posted on Reddit with an image copied from what appeared to be LocalBitcoins, however, the post was deleted shortly after. BeInCrypto reached out to LocalBitcoins for comment on the validity of the post and received a response that the information was indeed true.
LocalBitcoins currently does around $4.8 million in weekly trading volume in the United States according to Coin Dance.
Factors at Play
The reason behind the latest announcement was not specified, with Localbitcoins simply stating, “It has been a pleasure to serve you and we apologize for this inconvenience.”
The announcement comes off the back of recent news surrounding the U.S. Securities and Exchange Commission’s (SEC) latest move to charge Ripple (XRP) with operating and selling unregistered securities. The ongoing case has since put cryptocurrency exchanges on edge and many have decided to delist the project to avoid facing potential repercussions from the SEC.
One reason for the potential suspension of the majority of U.S states could be due to the SEC coming down on firms facilitating cryptocurrency transactions. Money laundering and fraud regulations vary greatly from state to state. Peer-to-peer (P2P) trades in the U.S. are not always following the appropriate standards of know-your-customer (KYC) and anti-money laundering procedures (AML).
LocalBitcoins has yet to release an official statement on the announcement, even though it has been confirmed by the platform itself.