Local Bitcoin Quietly Suspended Accounts in Various Regions Without Notice

Industry |

According to Forbes, LocalBitcoins is a Finland-based major global P2P crypto exchange and has reported they have suspended accounts in some countries including Africa, the Middle East, and Asia with absolutely no warning. This has caused many users unable to withdraw their Bitcoin.


Bitcoin has not made a public statement regarding the suspensions since the report was released last week.

According to the report, complaints started pouring in by LocalBitcoins users from countries including Iraq, Afghanistan, Syria, Nigeria, and Pakistan. They claimed they were not able to withdraw their Bitcoins without deleting their accounts.

To date, LocalBitcoins has not officially announced anything regarding the matter. Cointelegraph has asked the company to provide a comment but did not get a response. Meanwhile, on January 28th, Bitcoins tweeted they have some maintenance planned for their website which will take a while.

The Immediate Suspecte: AML law  

According to affected users, after the suspension, many of them commented on Reddit and believe this is connected to the European Union’s new Anti-Money Laundering (AML) law which is referred to as the 5th Anti-Money Laundering Directive (SAMLD). 


On January 28th, a post on Reddit claiming that new accounts are not able to send Bitcoin they received in their wallets and is falling on the deaf ears of customer support.

As of January 22nd, a personal blog post said the users that had their accounts suspended were shown the following statement:

Paraphrasing - customers who reside or are located in the following countries are required to have an enhanced due diligence process. 

The countries are defined by the EU commission including Afghanistan, American Samoa, The Bahamas, Botswana, the Democratic People’s Republic of Korea, Ethiopia, Ghana, Guam, Iraq, Libya, Trinidad and Tobago, Tunisia, the US Virgin Islands, and Yemen.

Other reports on Reddit, LocalBitcoins users will have to wait 14 days to delete their accounts in order to withdraw their Bitcoin. Another user said he had to request his account be deleted in order to get access to his crypto and adding he was affected by the new unannounced policy by LocalBitcoins.

Another user said he was put on a forced holiday probably because he is from one of the targeted countries. He has submitted his account deletion request and did receive a confirmation email from the support team. 

Meanwhile, another user said his account was suspended for absolutely no reason.

Even worse, Nader Dirany, co-founder of BuyBitcoinLeb, said his account was suspended, leading to the termination of his entire business even though he set up his account almost 3 years prior and verified his account with his passport. 

The BuyBitcoinLeb co-founder said that LocalBitcoins has not offered any clear reason for the suspension of his account. Even though an email screenshot was seen by Cointelegraph, the response was:

We cannot provide details about the reasons behind the suspension of your account. Adding, the decision is final and cannot be revoked. You can no longer trade on LocalBitcoins. You cannot take on any new accounts or they will be blocked.

Trading Volum is Dropping to an All-Time Low

Founded in 2012, LocalBitcoins has shown trading volumes drop over 50% from June 2019 to January 2020. Even though they started off as one of the most popular exchanges for allowing safe P2P transactions directly between the retailer and the customer without third-party involvement. 


That said, they saw a notable drop in trading volumes after they abruptly terminated options for users to perform local cash trades.

According to reports, Bitcoin trading volumes have gradually dropped to an all-time low in early 2020. Global Bitcoin trading volumes on LocalBitcoins dropped more than 50% between September 2019 and early January 2020.