LocalBitcoins, a leading peer-to-peer (P2P) cryptocurrency exchange, has reported that it has managed to significantly reduce the amount of darknet-related transactions done using the platform. The P2P platform claims that it has seen a decline of over 70% in transactions from darknet markets between September 2019 and May 2020. The chief marketing officer at LocalBitcoins, Jukka Blomberg told the crypto news outlet Cointelegraph that the drop in darknet-related transactions has come in response to Anti-Money Laundering and Know Your Customer regulations adopted by the platform in September last year.
LocalBitcoins faced criticism for adopting KYC regulations.
The peer-to-peer crypto exchange platform faced a lot of criticism from the crypto community for adopting regulations like Know-Your-Customer that requires users to give their personal information to the platform. However, by enforcing such regulations, the platform has managed to shrink down the darknet-related transactions by over 70%. LocalBitcoins said that their new customer registrations have surged over 50% since early this year from around 4,000 new daily sign-ups to over 6,000 sign-ups. The chief marketing officer said that the rapidly growing new customer numbers are signs of healthy demand and great future potential for the platform.
Reports claim P2P crypto exchanges continue to facilitate illicit activities.
According to a CipherTrace report, the peer-to-peer platform LocalBitcoins received over 99% of criminal funds among Finnish exchanges in the first five months of 2020. The firm also reported that Finnish exchanges have the highest share of criminal BTC received for the third year in a row, with 12% of all BTC coming directly from criminal sources. The chief marketing officer noted that as a Finnish company, LocalBitcoins only works with Finnish authorities in regard to cryptocurrency regulations. Other P2P platforms that allow buyers and sellers meet have also come under scrutiny for facilitating illicit activities.