Localbitcoins (LBC) suspends thousand accounts of 'perceived 3rd world countries' at the heist of '1st world'

BBNB recently shared the news about Localbitcoins mass NG Traders account block.
it turns out other 20 country wallets were also disabled.  Localbitcoins has been many people go to place to sell and buy cryptocurrency for a very long time.  But this article brings a bad news for thousands of users, although its not another Localbitcoins scam this time its a change in policy and it will be explained bellow.

People are questioning and wondering what more info localbitcoins would require out of their users after they have already given them passport,driving permit, proof of residence , address,ID etc

Localbitcoins Account Suspended

If you noticed that your localbitcoins account has been suspended and you are being redirected to the verification page while you have already completed the verification of Tier 1 , 2 or 3. The issue is not with your account but the issue is with a latest policy which Localbitcoins has decided to follow based on EU Commission.

Failure to Withdraw Bitcoing from your own Wallet. Users are shown with a verification status message even if they are Tier 3 verified.

EU Commission Due Diligence Countries Suspended on LocalBitcoins

The following message is being shown to users who got their accounts abruptly suspended

Customers residing or otherwise located in the following countries are required to have an enhanced due diligence process. The countries are defined by EU commission: Afghanistan, American Samoa, The Bahamas, Botswana, Democratic People’s Republic of Korea, Ethiopia, Ghana, Guam, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands, Yemen.

What Next If My Country is Listed ?

If your country is mentioned it would mean that you can not trade on localbitcoins, you can not make new ads or buy from already listed ads. It also mean that you can not withdraw your held bitcoin from the wallet.
If you want to withdraw your bitcoins you will have to delete your Localbitcoins account. It might not be a big thing if your account is new and have less trades but for many bigger traders it isn’t the best option aswell. While they are stuck with lots of bitcoin stuck in their wallets and withdrawing them means losing their old accounts which have credibility.
Many users are also reporting that they are getting the same message as shared above while their country is not mentioned in the list of countries, there are chances that the issue will be fixed for them sooner.

Can I Ever Trade on Localbitcoins ?

As of now there is no timeline on when such accounts will be reinstated and trading will be allowed for the countries mentioned above.

The process to activate the account will be introduced in the near future
Localbitcoins statement regarding when such accounts will be activated

As stated above the website has not provided any specifics details about when the process will be initiated although I think it can take up a few months as it requires localbitcoins to address various legal aspects of enabling access for such countries.

Exit Scam – Crazy Theory

The reason for not informing all the users prior to implementing the policy was something else. What if LBC could not process all the bitcoin withdrawal had they informed the users because everyone would atleast empty their wallets when they know that their account will be suspended with withdrawals disabled. To avoid that outflow of bitcoin, localbitcoins simply thought to suspend the users and deal with the withdrawals on a slower pace. Where they are keeping BTC ? Do they need a reaction time to be able to provide our bitcoin ? One reddit user even jokingly called it an exit scam. It’s just a Crazy Theory, or is it ?

Conclusion

Localbitcoins is one of the best websites but this particular issue shows that they do not care much about their users. As they could have given a deadline to users that a new policy will be introduced and what all will happen in that policy. Introducing a policy which suspends a thousand users from trading and from withdrawing their bitcoin is not a good thing. But hopefully they will introduce a procedure that the users from listed countries can trade and take full advantage of Localbitcoins. Users have also started showing their anger on reddit /r/localbitcoins about issues which I have highlighted in this article.