Many have heard of LocalBitcoins.com, a site started in the early days of Bitcoin allowing peer-to-peer trading, a key benefit being faster transactions (for example, same day for in-person trades) and better privacy, since it's not the site itself exchanging currency. They received tons of free word of mouth advertising in the form of "must use" recommendations. People understood companies directly converting fiat to cryptocurrency would quickly draw the attention of regulators.
Unfortunately, LocalBitcoins.com ended up falling prey to regulators anyway and now has mandatory ID policies. This creates a bait-and-switch effect. Highly knowledgeable, liberty-minded crypto users from the early days recommended LocalBitcoins as an ideal site for exchange, but this advice never got retracted. An ID requirement in the beginning would have reduced recommendations propelling them up!
This has effectively turned LocalBitcoins.com into a honeypot, a term used by law enforcement to mean something acting as a magnet for anyone who might break a law, which simultaneously exposes them to capture.
Indeed, not even 6 months after the ID requirements came news of the arrest and conviction of "Bitcoin Maven" a popular p2p trader of crypto from the early days. I have a confession to make. I traded with Bitcoin Maven, which I guess means I associate with common criminals. That's what Theresa (her real name) is now branded as, after all. The trade I made with her many years ago in L.A. helped me. I had Bitcoins and needed quick cash, not for drugs or anything illicit, just mundane stuff like bills or rent. After we concluded our trade in a Starbuck's we continued chatting for perhaps another 30 minutes, spontaneously. Theresa was just really easy going and pleasant to talk to that way, not the type one would typically think of as a criminal low life. Still, that's exactly what she has been convicted as. Is this fair? Let's do a comparison. In 1933 President Roosevelt issued a very unconstitutional (meaning illegal) Executive Order forbidding Americans to own gold. That's surprising since the highest law of the land, the U.S. Constitution, specifically says the only thing which can be used as money must be gold and silver coins. So the president usurped a founding document of the United States, a document he swore an oath to uphold, affecting the entire country, millions of lives. Usually, proclaiming support for a nation's principles, then doing an about face to oppose them is called treasonous; and the penalty for treason most places is death. However, nothing happened to Roosevelt, no jail time, not even a slap on the wrist. In fact he continues to be cast in an honorable club of esteemed U.S. presidents. Crime and illegality it seems is in the eye of the beholder.
More arrests have followed. In August of 2018 another LocalBitcoins.com trader, a 21-year-old, was also arrested on "money laundering" charges. This youth made the mistake of thinking the role of government is one of servant to its creators, the people (the way it was set up initially) and so didn't get proper permission to work with money. These are just high profile examples which made it to crypto publications. Who knows how many others have fallen into the honeypot. An issue people seem to be unaware of is when a financial site begins working with government usually they can't tell users about government activity involving them. A user's experience would give no warning signs they might be inviting an arrest. So word must be spread: LocalBitcoins.com is now admittedly working directly with government, and should appropriately be labelled for what it is: a honeypot. A site like Coinbase.com similarly works with government, but is cast in the right context. Users know upfront Coinbase is like a bank. They have complied with regulations and required strict identity proofs from day one. There shouldn't be a mistaken belief activity done on Coinbase is hidden from governments. LocalBitcoins.com continues to give users this false pretense of privacy, to their detriment.
Luckily, the cryptocurrency space continues to evolve and there are safer alternatives. The ideal option is something as decentralized and peer-to-peer as cryptocurrency. One project in this category is called Bisq, which has had marginal success. Another new project which is completely p2p, although not completely decentralized, but vows to never work with government is PeerTraders.cash, a site using Bitcoin Cash in escrow to trade coins and cash. Deposits are held securely in p2p multisignature wallets, preventing hacks, and users can earn 50% of trading fees as peer arbitrators.
As the ecosystem continues to evolve hopefully privacy enhancing sites and tools will become stronger, not weaker, and certainly not turn around to become a tool for overreaching, hypocritical governments.
 

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I had a look at localbitcoins.com last night, and that place stinks. They actually added some altcoins in there to be able to trade, but no Bitcoin Cash. I wouldn't buy there even if they did as its way more expansive then buying from exchanges.
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