LocalMonero Shutdown Is Another Blow for Privacy Tech

It is getting harder to buy XMR, but every day that monero continues to exist is proof positive of its value, says CoinDesk's Dan Kuhn.

AccessTimeIconMay 16, 2024 at 8:07 p.m. UTC
Updated May 16, 2024 at 8:10 p.m. UTC

As of May 14, all trades on LocalMonero have been disabled. And in six months the entire website will be taken down, parent company AgoraDesk, which is also winding down, said in a statement.

“After almost seven years of operation, due to a combination of internal and external factors, we have made the difficult decision to close our platform.

“We're extremely thankful for the love and support we've received over the years. We couldn't have done it without you. We love you all,” the statement read.

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As mentioned in the announcement, the peer-to-peer exchange created to trade the eponymous privacy coin monero (XMR), LocalMonero has been around for most of Monero's existence.

Although AgoraDesk did not provide a specific reason for shutting down, it’s easy enough to intuit why. In recent months, a slew of P2P crypto trading platforms including LocalBitcoins and Paxful have called it quits – a trend largely driven by regulatory headwinds. To wit:

“Regulatory challenges for the industry continue to grow, especially in the paper-to-peer market and most heavily in the U.S. While we work through these issues,we have taken the most secure option and ask you to explore self-custody and trade elsewhere,” Ray Youssef, ex-CEO of Paxful, said in a statement at the time the now defunct platform closed.

Problems for LocalMonero were largely compounded by pressure from regulatory authorities on privacy coins. Crypto exchanges OKX, Binance and Coinbase have all proactively delisted privacy-preserving tokens like monero and zcash (ZEC), leaving services like LocalMonero one of the few places to purchase XMR.

LocalMonero functioned a bit like Craigslist, providing a place where individuals could post an ad to either buy or sell XMR via a variety of different methods – essentially any payment method the counterparties agreed upon would work. One ad was for someone looking to trade cash for monero in person listed Detroit Zoo as a meeting point.

There was generally a slight markup on LocalMonero token sales because users were willing to pay a premium to buy the token on a platform that asked for limited identification (though it was customary for sellers to request ID as a kind of failsafe.) The platform also offered “arbitration bonds” that would hold an equivalent amount of monero in escrow so that if a seller failed to send the funds, LocalMonero could reimburse users.

Where to buy monero now?

LocalMonero has been “a cornerstone of the no-KYC Monero ecosystem,” semi-pseudonymous privacy advocate Seth For Privacy said on X, adding that with its closure monero users are left with few fiat-to-crypto rails for the token. It is an “incredibly sad day,” he said.

On Reddit and the LocalMonero forum, users discussed alternative means of buying XMR, which, with a $2.5 billion market cap, is the largest privacy coin. These include buying another cryptocurrency like bitcoin (BTC) or litecoin (LTC), sending it to the privacy-focused Cake Wallet and then swapping for XMR.

The Bisq peer-to-peer network also enables swaps between cryptocurrencies into monero. Kraken also still offers monero purchases, though it excludes users from certain countries including the U.K. and Australia and will extend that list to Ireland and Belgium in June. Less secure buying options include purchasing directly from someone on messaging apps like Telegram.

For its part, LocalMonero recommended the non-custodial, decentralized exchanges Haveno Serai, which are open-source alternatives that have yet to fully launch. Haveno runs on the Tor network and functions using atomic swaps, while Serai will use a multisignature setup.

While the old adage that “if there’s a will, there’s way” will likely always remain true for those looking to make anonymous transactions is cryptocurrencies like monero, it is undoubtedly the case that blockchain-based privacy tech is becoming harder to access. And it’s hard to see this trend reversing.

But, every day the Monero network is maintained, and every day that XMR is used for purchases, is another day that proves the power and resiliency of decentralized systems.

“Feds really must hate monero. Guess it’s a proof to keep using it,” as one Reddit user said.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Edited by Benjamin Schiller.


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Daniel Kuhn

Daniel Kuhn is a deputy managing editor for Consensus Magazine. He owns minor amounts of BTC and ETH.