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LocalMonero Exchange Closes Amidst Shrinking Crypto Privacy Services

May 8, 2024 at 04:09

LocalMonero, a peer-to-peer (P2P) trading platform known as the Monero equivalent to LocalBitcoins, has ceased operations after seven years of service to the Monero community. The platform’s shutdown contributes to a broader decline in crypto privacy services and related legal issues.

Effective immediately as of May 7, LocalMonero halted all new user registrations and advertisement postings for Monero (XMR) trades, with a complete cessation of trading activities slated for May 14. The exchange, while citing various internal and external pressures for its closure, specifically noted the growing adversities facing privacy-oriented services as a contributing factor. The platform is scheduled to go offline permanently on November 7, and users have been urged to withdraw any remaining funds to avoid loss.

Since its inception in 2017, LocalMonero has been pivotal in facilitating non-KYC (know your customer) transactions within the Monero community. However, the development of decentralized exchanges like Haveno and Serai, along with significant privacy enhancements like Full-Chain Membership Proofs (FCMPs) for Monero, are expected to sustain the cryptocurrency’s ecosystem moving forward.

This closure follows a series of regulatory actions against privacy-focused crypto entities, including Kraken’s recent withdrawal of Monero support in Ireland and Belgium and legal troubles surrounding Tornado Cash. The broader context includes a crackdown on privacy coins and technologies, highlighted by the arrests of the co-founders of the Samourai Wallet and shutdowns of other privacy-centric services like Wasabi CoinJoin and Trezor Coinjoin.

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Despite these challenges, not all view the regulatory environment as completely opposed to privacy technologies. Alan Scott, a contributor to the Ethereum-based privacy protocol Railgun, suggested in early May that while law enforcement agencies are concerned, their primary focus is on preventing privacy tools from shielding criminal activities, rather than opposing the privacy features themselves.

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