P2P Exchange LocalBitcoins Adds Crypto Surveillance Tools From Elliptic

Elliptic's tracing software bolsters the peer-to-peer exchange's anti-money laundering safeguards.

AccessTimeIconJul 28, 2020 at 7:00 a.m. UTC
Updated Sep 14, 2021 at 9:36 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Longtime peer-to-peer exchange LocalBitcoins, a former hub for anonymous bitcoin swaps, has added two blockchain-tracing tools from analytics company Elliptic as it continues to chip away at criminal crypto cashouts.

  • LocalBitcoins announced Tuesday it’s using Elliptic’s Navigator risk analysis tool and Lens wallet screener to crack down on illicit crypto. Blockchain analysis firms have previously claimed that LocalBitcoins receives the bulk of Finland’s criminal coin.
  • The Helsinki-based platform has been bolstering its anti-money laundering (AML) safeguards in response to the European Union’s AMLD5 and tough new Finnish business regulations, both of which turned up the heat on regional crypto businesses.
  • In the run-up to Finland’s enforcement deadlines, LocalBitcoins ditched cash-for-crypto trading and added mandatory identity verification. It also banned Iranian users from trading bitcoin, likely in response to U.S. sanctions.
  • Elliptic Chief Scientist Tom Robinson told CoinDesk that such policy shifts have contributed to a 50% drop in darknet crypto inflows for the year.  
  • “The reduction in flows from dark markets to peer-to-peer exchanges is a clear consequence of these businesses introducing strong KYC and AML controls,” he said. “Criminals are now thinking twice before trying to cash-out through the major peer-to-peer exchanges.”
  • LocalBitcoins did not respond to requests for additional comment.

Ian Allison contributed reporting.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.