Peer-to-Peer Exchange LocalBitcoins Updates ToS, ID Verification “May Be Required”

  • Peer-to-peer bitcoin exchange LocalBitcoins has recently revealed it’s updating its Terms of Service on May 25.
  • Per the company, its updated ToS mean users may be required to verify their ID with the company in specific situations, including if they are under investigation or trade over certain limits.

Peer-to-peer cryptocurrency exchange LocalBitcoins has recently updated its Terms of Service (ToS), in a move that may see the company ask users for their IDs in specific situations, effectively compromising anonymity.

According to the company’s updated ToS, the company may enforce ID verification “in some situations,” which include the detection of authorized access and account recovery as, presumably, security measures.

Other situations in which LocalBitcoins may ask its users to verify their ID include “trading over certain volume limits,” fraud investigations, and allowing users to advertise on the platform. The company’s post reads:

“It is our top-most priority to ensure that LocalBitcoins is a safe and securebitcoinmarketplace [sic] and that no one is able to use our service for money laundering or other unlawful activities. Most fraud on LocalBitcoins stems from users attempting money laundering. We believe that taking a strict stance in this regard is in the interest of our users and important for our brand as a trustworthy marketplace.”

LocalBitcoins

LocalBitcoins was founded back in June 2012 in Finland, and has been one of them most popular peer-to-peer bitcoin trading platforms since then. Its users have been able to use the platform in a somewhat anonymous manner, as no ID verification was necessary. While the platform gave users the ability to verify their IDs so other users would trust them, it wasn’t a requirement.

Notably, this year various traders who claim to have been trading “significant” amounts of BTC were reportedly asked to verify their ID with the company in order to keep using its platform. Over time, various LocalBitcoins traders have been arrested for various reasons, including running unlicensed money services businesses and money laundering.

In light of these developments, various users on Reddit speculate remaining anonymous on the platform will no longer be possible once these changes come into effect, on May 25. The changes are partly based on the European Union’s General Data Protection Regulation (GDPR), a regulation brought forth to limit data harvesting, and allow users to own their identity rights online.

The peer-to-peer exchange will now also require individuals to only have one account. Those who are under 16 years old will no longer be allowed to use the platform.

Those Banned From Facebook May Not Be Able to Use Its Cryptocurrency Libra

Facebook’s two days of congressional hearings on the social media giant’s cryptocurrency ambitions seemingly revealed that those who have been banned from Facebook may not have access to Libra.

During the congressional hearing Facebook had to answer some tough questions, and one of them came from Representative Sean Duffy, which asked the company’s cryptocurrency head, David Marcus, who’ll have access to Libra.

The Congressman initially asked Marcus who could use the cryptocurrency, to which Calibra’s CEO answered: “anyone that can open a Calibra account, that can go through KYC [know-your-customer checks] in countries where we can operate.”

Duffy then referenced two individuals banned from Facebook for violating its community guidelines, Louis Farrakhan and Milo Yiannopoulo, and asked whether they’ll be able to use the social media giant’s cryptocurrency.

Marcus ended up replying he doesn’t “know yet,” after seeing Duffy hold a $20 bill and ask hin who can use it. His point was that cash doesn’t discriminate, and that anyone who can hold it can use it.

While throughout the hearing Marcus tried to point out the company will follow appropriate regulations and comply with lawmakers, Duffy responded that a proper answer would be “as long as you abide by the law, you can use Libra.” The fact he didn’t get this answer, Duffy said, gave him “great pause.”

Speaking to The Daily Beast Elka Looks, a Facebook spokeswoman, clarified Marcus addressed the Congressman’s concerns later on in the hearing. She stated:

For Libra, anyone who is engaging in lawful activity will be able to transact on the network. Facebook will have no say. For Calibra, there is no policy in place yet, but we will share it when it is closer to being finalized.

The news outlet adds that Calibra, Facebook’s wallet to send, receive, and hold Libra, doesn’t yet have final terms of service or a privacy policy. All of this means that those who’ve been banned on Facebook may not have access to its cryptocurrency.

As CryptoGlobe covered, Congressman Warren Davidson implied during the hearings Facebook’s crypto is a ‘shitcoin’ as it doesn’t have some of the properties bitcoin has. The Congressman made it clear bitcoin has no central authority that can censor transactions or dilute its value, while Libra has the Libbra Association.