LocalCryptos, a peer-to-peer (P2P) crypto exchange, has declared plans to shut down operations after being in the market for five years. The) crypto exchange becomes the latest casualty of the ongoing crypto winter.
LocalCryptos first entered the market in October 2017 as LocalEthereum. At this point, the company’s vision was centered on Ethereum (ETH) with sub-ratings of singularity, volume, empathy, and timeline. In November 2019, they added support for non-custodial P2P trading for Bitcoin (BTC) and rebranded to LocalCryptos, allowing users to buy and sell ETH and BTC without KYC. Since then, the crypto exchange has amassed almost 400,000 registered users.
However, the prevailing bear market conditions have compelled multiple operators like LocalCryptos to close shop. According to the firm’s October 22 Twitter post:
“On LocalCryptos’ 5th birthday, we’re announcing the tough decision to begin to wind down the marketplace. This will be gradual over the next couple of months — LocalCryptos remains operational.”
The decision to exit the market followed extensive deliberation for various options and attempts at different solutions to keep the platform’s vision alive. However, the ultimate decision was to close down and steadily terminate services.
According to LocalCryptos’s blog post published on October 21, the decision to exit the market was voluntary. Among the cited reasons are difficulties with the prolonged bear market and cryptocurrency regulation uncertainties. The decision also heavily influenced by “personal health matters affecting the development and progression of the marketplace,” according to LocalCryptos.
However, the crypto exchange noted that none of the three reasons was singularly sufficient and that they all played motivating roles saying, “…they are each motivating factors in our decision.”
So What’s Next?
Noteworthy, LocalCryptos will remain operational until November 4, offering customers an avenue for buying and selling crypto using any payment method.
Past the deadline, no users will be able to create new accounts. However, existing users will continue enjoying normal operations. The platform has also communicated that from November 18, no user will be allowed to create new trades, as the feature will have been disabled.
LocalCryptos enables you to buy and sell crypto using non-custodial wallets and a non-custodial escrow system — powered by smart contracts. With this grit, services around the non-custodial web wallet interface will remain available while trades will be open beyond the date and typically allow users to complete the transactions.
Interestingly, LocalCryptos has announced that its website will run indefinitely for its wallet user interface.
Despite exiting the market, LocalCryptos continues to serve customers diligently. The platform has assured that it will refer users to other legitimate P2P platforms. The announcement stated:
“…we decided to gradually end our services and recommend our users to other P2P platforms.”
The platform also plans to continue publishing its newsletters, Bytes, and expand it into an independent entity focusing on DeFi and related technologies.
With these, the P2P platform has invited its community of users to remain vigilant and be wary of fraudsters who may use this transition as an opportunity to trick unsuspecting users.
The Bear Market is in Full Force
Crypto exchanges stand next in line after miners facing the wrath of a bearish crypto market. Beyond LocalCryptos, other operators that have succumbed to the bear market include crypto lending platform Celsius Network, Voyager Digital, and Three Arrows Capital, which filed for Chapter 11 bankruptcy after halting operations. LocalCryptos is the latest addition to the growing list of defunct crypto firms.
The inability to secure funding has also seen forms like Siacoin developer Skynet Labs close down, and others like German crypto bank Nuri have not found a buyer and are also set to close shop.
The voluntary decision by LocalCryptos to exit the market takes the form of Liqui’s decision in 2018 to shut down its operations through a brief goodbye note. During its closure, Liqui, a small but long-running Ukrainian crypto trading company, cited the inability to provide liquidity to its customers. According to the company, this nullified its economic reason to continue operations.
The market scenario witnessed in 2017 appears to be repeating itself in 2022, as evidenced by similar patterns of exchanges exiting the space.
