After 5 years, LocalCryptos is saying goodbye

Today is the LocalCryptos platform’s 5th and final birthday.

After five successful years, we have decided to wind down the LocalCryptos platform. This will be a gradual process taking place over the next couple of months. We understand that our loyal users won’t be too happy to hear this news, and we apologize.

We want to make closing down as clean and orderly as possible to allow our users a smooth transition to alternative P2P platforms. LocalCryptos will be winding down in phases, with the key dates included below.

LocalCryptos’ success

LocalCryptos, previously known as LocalEthereum, was launched on this day in 2017 as a hobby project. Over the years, it gained more than 400,000 registered users and grew to a team of approximately ten.

LocalEthereum began as an experiment. We had the idea of using an Ethereum smart contract as a peer-to-peer trading escrow mechanism, rather than a middle-man, and using a new cryptography-in-the-browser technology to power a non-custodial web wallet that can interact with that smart contract. Before LocalEthereum, there were other cryptography-powered peer-to-peer marketplaces like it, but they each required you to download an application onto your computer in order to access them, making it near-impossible for them to receive any mainstream adoption. LocalEthereum brought those ideas to the web browser so everyone, regardless of technical know-how, had the ability to trade crypto without the risks of hacks and thefts that plague centralized exchanges.

The experiment quickly turned out to be a success. Since then, we made massive improvements in functionality, efficiency, and user experience (with plenty of bugs along the way), including rebuilding our codebase from the ground-up in 2018 and giving the interface multiple major design overhauls that our dedicated users will remember.

In 2019, we discovered we can create a functionally similar non-custodial escrow mechanism using Bitcoin’s Script language, and so we relaunched as LocalCryptos, bringing non-custodial P2P trading to Bitcoin and other UTXO-based cryptocurrencies (Litecoin, Dash, and Bitcoin Cash).

It didn’t take long for Bitcoin to become the dominant crypto on LocalCryptos. By September 2020, roughly 50% of new trades were being completed in Bitcoin.

Unfortunately, increasingly high network fees made Ethereum-based trading relatively costly, especially compared to the traditional custodial alternatives that don’t have any network fees because activity doesn’t occur on-chain. This priced users in lower-income countries out of the marketplace for some time, until we introduced cheaper alternative cryptos like Litecoin, Dash, and Bitcoin Cash.

While we had much more planned for LocalCryptos, unfortunately we believe that internal and external factors prevent our small team from fully achieving our vision.

Why is LocalCryptos closing?

LocalCryptos has made the tough decision to voluntarily wind down for multiple reasons. Among the reasons include personal health matters impacting the development and progression of the marketplace, an anticipated downtrend in cryptocurrency markets, as well as challenging developments in the long-term regulatory trajectory amidst the global evolution of the crypto economy.

While any of these alone are not the sole reason, they are each motivating factors in our decision. We weighed up all the options, attempted various alternative solutions to keep the LocalCryptos vision alive, but in the end we made the decision to gradually end our services and recommend our users to other P2P platforms.

Bytes is sticking around—with more!

We’re excited to keep the Bytes newsletter, and to grow Bytes into a larger operation—keeping crypto users up to date with developments and controversies in DeFi and decentralized technologies. Very soon, Bytes will be moving to a standalone domain name and will be receiving a major facelift.

We’ll be making more announcements about Bytes in the near future.

A warning about scammers

Please be mindful that scammers see announcements like this as opportunities to prey on new victims during confusing or uncertain times. LocalCryptos will only be providing customer support via its official support ticket desk, and not on Telegram or other social media. Furthermore, if you receive a supposed email from us that is not from a “@localcryptos.com” email address, you’re most certainly the target of a phishing attack. You should be extra vigilant and remember to never reveal your password or private key(s) to anyone — including us.

To our users: thank you

We would like to extend a massive thank you to our users, and apologize for letting you down. We greatly appreciate the feedback and support many of you have given us over the years. We’ve received thousands of messages of support, and emails describing the impact LocalCryptos has had on you personally — these served as powerful motivators.

We also owe immense gratitude to our partners, vendors, and affiliates, including ChangeNOW, Bitcoin.com, PhishFort, and many others.

Your questions, answered

What are the key dates I need to know about?

From now until November 4th, all operations will continue normally.

After November 4th, new account creation will be disabled, however existing users can still use LocalCryptos normally.

After November 18th, new trade creation will be disabled, however existing users can still use the LocalCryptos non-custodial web wallet interface. Trades that are still open after this date can be completed as normal.

How can I get my crypto?

LocalCryptos is—and always has been—a non-custodial product, which means we don’t hold your cryptocurrency. Rather, your crypto is stored in a self-hosted wallet or locked in a non-custodial escrow mechanism on a blockchain. The LocalCryptos website will remain online indefinitely for its wallet user interface. Alternatively, users can continue to use the open source LocalCryptos Wallet Backup Explorer tool to access and transfer their crypto.

Please note that it is mathematically impossible for LocalCryptos to access or ‘recover’ your funds. If you have been contacted by somebody claiming to represent LocalCryptos who can offer a ‘password reset’ or ‘wallet recovery’ service, you are certainly the victim of a scam and you should contact LocalCryptos via its only official support desk.

Will you still provide customer support?

Yes, we will endeavour to continue responding to every support ticket. If you have a support ticket or active payment dispute after November, you will not be forgotten.

Is there a chance that LocalCryptos will come back?

Yes, it is possible that LocalCryptos will make a return in the future. We’ll let you know if that happens.