LocalBitcoins Claims 70% Reduction in Transactions Related To Darknet
The top peer-to-peer (P2P) crypto exchange LocalBitcoins has noted a 70 percent decrease in the number of transactions related to darknet since its adoption of AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations in September last year.
LocalBitcoins noted its ability to remarkably decrease the number of transactions related to darknet carried out using its platform between September last year and May this year.
In the words of the chief marketing officer at LocalBitcoins, Jukka Blomberg to Cointelegraph, the reduction in such kind of transactions is due to the exchange’s response to Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations which they adopted in 2019.
When the peer-to-peer cryptocurrency exchange decided to adopt KYC regulations, it was criticized several times in the cryptocurrency community. The adoption of regulations such as Know-Your-Customer requires users to give their personal information to the platform.
Nevertheless, the enforcement of such regulations helped the exchange bring down the number of such transactions. According to the cryptocurrency exchange, the number of new customer registrations has increased by more than 50 percent since early 2020 from about 4,000 new daily sign-ups to more than 6,000. Blomberg noted that this increase in the number of new daily sign-ups shows that there is healthy demand and great future potential for the platform.
Reports have it that P2P cryptocurrency exchanges are still facilitating illegal activities. CipherTrace’s spring 2020 cryptocurrency crime and anti-money laundering report noted that LocalBitcoins received more than 99 percent of criminal funds among Finnish exchanges in the first five months of this year.
“Finnish exchanges ranked #1 for highest percentage of criminal BTC received for the third year in a row, with 12.01% of all BTC funds received coming directly from criminal sources. LocalBitcoins, one of the largest peer-to-peer marketplaces, received over 99% of these criminal funds, said CipherTrace.”