LocalMonero, a peer-to-peer trading platform for the privacy-focused cryptocurrency Monero, has announced that it will be shutting down its services with immediate effect. The exchange will disable new signups and advertisement postings for Monero trades immediately and will stop supporting trading of the cryptocurrency starting from May 14. The reasons behind the closure were attributed to a combination of internal and external factors, although specific details were not provided. Users were urged to reclaim any funds from their wallets before November 7 to avoid potential loss, as unclaimed funds could be considered abandoned.
Established in 2017 as the Monero equivalent of LocalBitcoins, LocalMonero acknowledged the growth and maturation of the Monero ecosystem over the years. Despite the closure, the platform’s team expressed confidence in Monero’s future, pointing to upcoming decentralized exchanges such as Haveno and Serai, as well as the recently announced privacy update called Full-Chain Membership Proofs (FCMPs). The closure of LocalMonero has been seen as a setback for privacy coins and protocols, following Kraken’s termination of support for Monero in certain regions and recent legal action against Tornado Cash. Users have been left to speculate about the reasons behind LocalMonero’s closure.
Privacy coins and services have come under increased scrutiny from global finance regulators in recent months. The co-founders of the Samourai Wallet cryptocurrency mixer were arrested on charges of money laundering brought by the U.S. Justice Department and other agencies. Other privacy services such as Wasabi CoinJoin and Trezor Coinjoin have also shuttered as regulatory pressure on privacy-focused services has intensified. The U.S. government has cracked down on crypto-mixing services, with Tornado Cash being added to the Specially Designated Nationals list, banning Americans from using the mixer. The founder of Bitcoin Fog, a crypto-mixing service, was convicted of money laundering.
The closure of LocalMonero has highlighted the challenges faced by platforms that deal in Monero but are not entirely decentralized. Some speculate that centralization aspects may have been a contributing factor to the platform’s closure. The increasing regulatory scrutiny on privacy coins and services is evident in the crackdown on popular crypto mixers and the arrest of individuals associated with these services. Despite the challenges faced by the privacy-focused cryptocurrency ecosystem, there remains confidence in the future of Monero and other privacy coins. The closure of LocalMonero has underscored the importance of decentralized exchanges and the need for alternative platforms in the Monero ecosystem.
The Monero community has expressed sadness at the closure of LocalMonero, as the platform was seen as a cornerstone of the no-KYC Monero ecosystem. The absence of a direct fiat-to-XMR alternative has highlighted the significance of LocalMonero to the Monero community. The closure of LocalMonero comes at a time when privacy-focused services are under increased scrutiny and regulatory pressure, with repercussions for platforms and individuals associated with privacy coins. Despite the challenges faced by the privacy-focused cryptocurrency ecosystem, there remains optimism for the future of Monero and other privacy coins. The closure of LocalMonero has sparked discussions about the impact of centralized platforms on the privacy coin ecosystem and the importance of decentralized exchanges in ensuring the privacy and security of users.
