The rise and fall of LocalMonero

The co-founder of LocalMonero, Alex Daneo, announced on Reddit that he will be ceasing operations after almost 7 years. Like the also-defunct LocalBitcoins service for bitcoin (BTC), LocalMonero helped facilitate peer-to-peer trading of monero (XMR), a private-by-default cryptocurrency. Daneo cited “internal and external factors” that made it difficult to sustain LocalMonero’s operations.

Most people in the crypto industry interpreted those “factors” to be recent news developments: namely the criminal indictment of Samourai Wallet’s co-founders, and a public service announcement about non-KYC crypto money transmitters from the FBI. Those events sent a clear message: “Beware of financial services that do not ask for KYC information including name, date of birth, address, and ID before allowing you to send or receive money or cryptocurrency.”

Similarly to LocalMonero, the FBI-seized Samourai Wallet was a service for privacy-conscious users to swap money with ties to their identity for anonymized crypto assets. Although LocalMonero emphasized cash fiat for XMR, whereas Samourai was mostly BTC-for-BTC mixing, the primary value proposition was similar. Both services attracted users who wanted to pay a small fee to anonymize their money.

In the wake of those dual announcements by the US Justice Department and FBI, many privacy services and coin mixers have suspended operations.

  • Phoenix Wallet, a Bitcoin Lightning and privacy service, suspended key operations.
  • Wasabi, Samourai’s European competitor, terminated its coinjoin coordinator.
  • AgoraDesk, also co-founded by Alex Daneo, is winding down operations.
  • Kraken recently ceased delisted monero in Ireland and Belgium.

The LocalMonero team will spend the next six months winding down operations. Users will allegedly have until November 7, 2024 to withdraw their funds.

Read more: Who are Samourai Wallet’s Keonne Rodriguez and William Lonergan Hill?

Unknown volume, unknown impact of LocalMonero shutdown

Because LocalMonero merely facilitated meetups between buyers and sellers interested in peer-to-peer trades, it is difficult to find trading volumes facilitated by LocalMonero. Most actual transactions of XMR for cash probably took place off the platform entirely.

Because of its purposeful opacity, ranking websites CoinMarketCap and CoinGecko never bothered to add LocalMonero to its leaderboard of crypto exchanges – even though it was a real, mostly fiat-for-crypto exchange.

There is some circumstantial evidence that the volume was quite low at times. Five years ago, one user mentioned on Reddit that no monero seller was available on the site at that time.

In the early days, LocalMonero seemed to have a promising future. Alex announced the addition of a Tor single onion service early in LocalMonero’s existence. It also added an I2P domain and B32 I2P domain at around the same time. Generally speaking, it received good reviews from users. One user called it “easier than Coinbase.”

Users still have time to wrap up their activities and withdraw funds. LocalMonero is pulling the plug for good on November 7, 2024.

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