LocalBitcoins Darknet Market Transactions Drop By 70%: Report

LocalBitcoins darknet market transactions dropped by 70% after it adopted the KYC and AML regulations in 2019, as we are reading more in the blockchain news today.

LocalBitcoins is a peer-to-peer crypto exchange and managed to cut the number of criminal funds on the platform this year.  The LocalBitcoins darknet market transactions saw a decrease of about 70% between September 2019 and May 2020 according to the reports. The chief marketing officer at the exchange Jukka Blomberg explained that the drop comes as a response to Anti-Money Laundering and the Know Your Customer regulations adopted by the exchange in 2019. The calculations are based on the blockchain analysis by the analytics company Elliptic as well as the exchange’s clustering tools.

The 70% drop in darknet-associated transactions might appear not as important as LocalBitcoins experienced a huge decline in the amount of Bitcoin traded in 2019. As such, the weekly Bitcoin trading volume on the exchange collapsed from about 14,000 BTC in 2019, to about 4000 BTC in January 2020 according to Coin Dance. Between September 2019 and May 2020, the exchange saw a 20% decline in BTC trading volumes which is down from the average of 5000 BTC to 4000 in one week. Alongside the progress in fighting illicit transactions on the platform, LocalBitcoins was seeing some enhancement in performance according to Blomberg:

 “Looking at the last 2-3 months, we can already see a healthy growth trend and it is happening across all regions once again indicating a wide demand.”

LocalBitcoins said that the new customer registrations surged over 50% since the start of this year from 4000 to more than 6000:

The rapidly growing new customer numbers naturally are a sign of a healthy demand and great future potential for LocalBitcoins.”

Some other crypto analysts maintain that the exchange facilitates a huge number of illicit financial transactions. According to a recent report by CipherTrace, the exchange received more than 99% of criminal funds among the Finnish exchanges have the biggest share of criminal BTC received in the third year in a row with about 12% of all Bitcoin coming directly from criminal sources. Earlier in 2020, IntSights intelligence firm reported that P2P platforms are heavily contributing to money laundering. The startup elaborated that illicit activities are often associated because of a lack of regulations.

LocalBitcoins only works with Finnish authorities in regard to crypto regulations according to Blomberg. LocalBitcoins said that Finland was working with new legislation for its AML act in accordance with the EU AML regulations.