LocalMonero, P2P Trading Platform for Monero, Shuts Down

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In response to mounting regulatory pressure and a broader anti-privacy sentiment, LocalMonero, a peer-to-peer (P2P) trading platform for the privacy coin Monero (XMR), has abruptly shuttered its services, adding to a recent trend of privacy-focused closures and legal actions in the crypto space.

LocalMonero announced on May 7 that it would immediately halt all new signups and advertisement postings for Monero trades. Effective May 14, the platform will disable Monero trading entirely. 

LocalMonero Explains Closure

LocalMonero cited “a combination of internal and external factors” for its decision, although it did not specify the exact reasons for the closure. Hostility towards privacy-centric products and services was acknowledged as a significant factor.

Users were informed that the website would be taken down on November 7, and they were urged to reclaim any funds from their wallets before that date to avoid them being considered abandoned.

Regulatory Challenges

Launched in 2017 as the Monero equivalent of LocalBitcoins, LocalMonero served as a vital platform for Monero enthusiasts seeking to engage in P2P trading without the need for extensive Know Your Customer (KYC) verification processes. 

However, the platform’s closure reflects the challenges faced by privacy-focused projects in the current regulatory climate.

LocalMonero Expresses Optimism

Despite the shutdown, LocalMonero expressed optimism about Monero’s future, citing the impending launch of decentralized exchanges such as Haveno and Serai, as well as the Full-Chain Membership Proofs (FCMPs) privacy update. The team believes these developments will ensure Monero’s resilience and growth in the future.

The closure of LocalMonero is viewed by privacy advocates as another setback for privacy coins and protocols. “Seth For Privacy,” a prominent privacy advocate, lamented the platform’s closure, describing it as an “incredibly sad day” for the no-KYC Monero ecosystem. 

He noted that LocalMonero had been a cornerstone of Monero trading and expressed concerns about the lack of alternatives for direct fiat-to-XMR trading.

Recent Actions on Privacy-Focused Services

This closure follows recent actions against privacy-focused services, including Kraken’s termination of Monero support for customers in Ireland and Belgium and legal action against Tornado Cash, a privacy-focused Ethereum mixer. The co-founders of crypto mixer Samourai Wallet were also arrested on money laundering charges in April.

While intelligence agencies have expressed concerns about privacy protocols potentially impeding their ability to track illicit activities, the broader crackdown on privacy services suggests a challenging environment for privacy-focused projects in the cryptocurrency space.

As regulatory scrutiny intensifies, the future of privacy coins and services remains uncertain, with the industry closely watching for further developments and potential legal actions.

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