Bitcoin exchange LocalBitcoins set to shut down this month

Bitcoin (BTC/USD) peer-to-peer (P2P) exchange LocalBitcoins has today issued a service closure statement stating that it is set to shut down this month due to the “ongoing very cold crypto winter.”

The Helsinki-based exchange has been in service for the last 10 years making it one of the longest-serving and best P2P cryptocurrency exchanges. It offered a very simple Bitcoin on-ramp and off-ramp since it allowed people to buy and sell BTC in their local currencies via traditional bank transfers, online payment services, and cash deals. Being a P2P exchange, people bought and sold bitcoins to each other on the platform at favourable market prices.

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LocalBitcoins woes

LocalBitcoins’ trading volume averaged between $5 million and $7 million in the last four months, portraying a considerable drop from its previous volumes of as much as $100 in 2017.

It has however been banned in Russia since October 2020 after the Russian telecommunications services regulator blocked it from issuing services in the country.

In their closure statement, the exchange said:

“We are therefore sad to share, that regardless of our efforts to overcome challenges during the ongoing very cold crypto-winter, we have regretfully concluded that LocalBitcoins can no longer provide its Bitcoin trading service. We encourage all customers to withdraw their funds from LocalBitcoins and we ask you to proceed with withdrawing the Bitcoins from your LocalBitcoins wallet. You have 12 months to withdraw, however of course we encourage you to proceed withdrawing sooner.”

The exchange will shut down on February 16, just two days after valentines, after which customers will have 12 months to withdraw their crypto assets. The exchange will therefore remain open for the next 12 months but only for users to log in and withdraw but not to buy or sell.

The fall of LocalBitcoins comes at a time when several crypto firms are facing tough times due to liquidity issues attributed to the fall of the FTX crypto exchange that affected very many crypto businesses around the world.