LocalMonero Shuts Down Services Amid Growing Privacy Crypto Regulatory Challenges
Summary:
LocalMonero, a peer-to-peer trading platform for the privacy-centric cryptocurrency Monero (XMR), has abruptly discontinued all its services. From May 7, new user registrations and ad postings for Monero trades are disabled, and by May 14, trading of the cryptocurrency will cease. The firm cited unspecified "internal and external factors" for its closure and advised users to reclaim their funds before the website shutdown on November 7. This move is regarded by many as the latest setback for privacy coins in a shifting regulatory landscape.
LocalMonero, a peer-to-peer trading platform for the privacy coin, Monero (XMR), has abruptly halted its services, becoming the latest casualty in the growing wave of privacy crypto setbacks and legal issues. As of May 7th, LocalMonero has ceased to accept new user registrations and advertisements for Monero transactions. From May 14th, trading the privacy-concerned cryptocurrency will be disabled on the platform. While the firm attributed this shutdown to "a mix of internal and external factors," it did not provide specifics.
The platform, which started in 2017 akin to LocalBitcoins for Monero transactions, urged users to reclaim their funds before its official website shutdown on November 7th, failing which the funds could be tagged as abandoned.
LocalMonero acknowledged the vast evolution of the Monero system over the years and the imminent launch of decentralized exchanges like Haveno and Serai, along with a newly revealed privacy enhancement named Full-Chain Membership Proofs (FCMPs). It expressed belief in a promising future for Monero "with or without our platform."
The decision to shut services is being viewed by some as another setback for privacy coins and protocols. This follows Kraken's decision to cease support for Monero for its Irish and Belgian users in April and the subsequent legal actions taken against Tornado Cash.
Privacy Advocate Seth For Privacy described it as an “incredibly sad day,” expressing his thoughts on X on May 7th. He highlighted LocalMonero's significance as “a cornerstone of the no-KYC Monero ecosystem,” and noted that there currently isn't a direct fiat to XMR substitute. However, he pointed out that although LocalMonero did not state any reasons for their close, users could form their own theories.
In recent times, privacy tokens and services have been in the crosshairs of global financial regulators. This includes the arrest of the founders of crypto mixer Samourai Wallet on money laundering charges in April. Additionally, privacy services like Wasabi CoinJoin and Trezor Coinjoin have recently been disbanded by their creators as the clampdown on privacy gets more intense.
Nonetheless, the situation may not be as straightforward as it appears. An early May comment from Alan Scott Jr., a contributor to the Ethereum privacy protocol Railgun, suggested that intelligence agencies might not be as adverse to privacy protocols as many think. He stated that "Their concern is the potential problems around impeding their ability to catch bad actors,” while referring to agencies like the FBI.
Published At
5/8/2024 6:43:56 AM
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