LocalBitcoins, a major peer-to-peer (P2P) crypto exchange, has reportedly managed to significantly reduce the amount of criminal funds on its platform by 2020.
The P2P platform has seen a decline of more than 70% in transactions in the darknet markets between September 2019 and May 2020, says LocalBitcoins.
Jukka Blomberg, LocalBitcoins‘ marketing director, told Cointelegraph that the drop is in response to the anti-money laundering and Know Your Customer regulations adopted by the platform in September 2019.
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The calculations are based on blockchain analysis performed by leading cryptanalysis firm Elliptic, as well as LocalBitcoins‘ own „clustering tools,“ the firm said.
The drop remains remarkable despite Bitcoin’s commercial collapse in 2019
A 70% drop in darknet transactions may seem insignificant as LocalBitcoins experienced a massive drop in the amount of Bitcoin (BTC) marketed in 2019. As such, weekly Bitcoin trading volumes at the exchange collapsed from nearly 14,000 BTCs in January 2019 to approximately 4,000 BTCs in January 2020, according to Coin Dance.
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However, between September 2019 and May 2020, LocalBitcoins experienced only a 20% decline in BTC trading volumes, down from an average of 5,000 BTCs to 4,000 Ethereum Code in weekly trading.
LocalBitcoins says it is experiencing healthy growth in recent months
Along with the apparent progress in fighting illicit transactions on its platform, LocalBitcoins has been seeing an increase in performance, Blomberg said. „Looking at the last 2-3 months, we can already see a healthy growth trend and it’s happening in all regions once again, indicating a great demand,“ the executive added.
LocalBitcoins said its new customer registrations have increased more than 50% since early 2020, from about 4,000 new registrations per day to more than 6,000. „The rapid growth in the number of new customers is naturally a sign of healthy demand and great future potential for LocalBitcoins,“ Blomberg said.