It seems after over 12 hours of not allowing users to send out external transfers, LocalBitcoins has finally solved an issue some people were calling a potential hack or exit scam.
Starting around noon EST on September 5th 2020, users across the site reported their transfers were stuck in pending send, meaning that this was purely on the LBC side and it was not sending out crypto into the blockchain, which is understandable as a technical issue for 2-3 hours but for almost a day has the market in arms.
Many users interviewed from LocalBitcoins told us even though this has happened a handful of times in the last 5 years, this is the first time they have ever seen it happen without notice and for such a long period of time.
This is on top of the lack of any social media or digital response from the normally punctual company . We just got word at the start of day on the 6th around 5 am eastern transfers began to go through.
This is extremely concerning for crypto holders as LBC is the most well known and highest volume platforms for crypto online, this incident clearly has many on the site and in the industry worried for a potential hack, exit scam, or simply a shutdown that today’s events may just be the first symptom the crypto community sees, as they have commonly with all major hacks and exit scam events in the last decade.
Also the lack of upgrades and interface to what regular market players have come to expect from their exchange, their trading platform/tools, and the transparency that comes along with it. LBC has suffered from this during the year as well due to their lack of any real infrastructure updates, while the most clear case may be seen with futures platforms like bitmex and deribit, which has lost 30+% market share since it almost crashed the entire bitcoin market to zero back in March.
On the bright side, new products and entries into the futures market from Binance, Kraken, FTX, as well as PrimeXBT have taken huge amounts of market share as a crypto cfd forex all in one futures platform with no slippage or system overloads, while offering 50 percent lower fees and 1000x leverage in addition to the first real affiliate tier system in crypto.
This was the best source we can find for information on this that was not on social media, it seems media outlets are being slow to pick it up and the severity of what this could mean both directly and in the short term as well as what the whales and market movers actually think in terms of the prospects for Bitcoin.
It is a good site CCweekly and written well enough but they are a bit below CCN and Bitcoin.com not to mention mainstream , they asked us to quote the entire thing at the bottom, helps them get “hands on with the people they review”.
Kudos either way to them, just there are many other outlets that could have easily had a very clear and data driven + analysis yesterday evening already, and even when twitter made a storm about it no one from LBC or affiliated partners responded or did anything to ease worry. I am a fan of LBC as they really created the model for how BTC has been traded and people though 3+ years ago we’d have a huge level and infrastructure move up, but LBC stayed the same functionality-wise, scaled, and continues to exponentially grow in volume and it’s domination of the landscape.
The whole thing the technical side, lack of communication, lack of interest from the “crypto” media that is owned by exchanges and whales, the scale of LBC, and the fact their infrastructure is so perfect for pulling a complex almost ruthless legal but morally unjust exit “strategy”. I say that because I think the game is evolving(see Binance court case in NY, UK regulators cracking down on XBT, etc) they are to smart for a scam, that hurts people rather than the traditional dump and run exit scam.
And we all have learned time and time again, things like this have 100 percent of the time been part of the initial stages of every exit scam, doesnt mean thats what it is. You know what, theres only one real thing that matters to sum this up.
Do you think that the average person significantly involved in crypto, trading especially, would call my concerns on this paranoia? Or would they think its crazy not to be as worried as I’ve expressed.
Ask yourself that even, and let us know in the comments, post on social media, etc because it seems no one else wants to engage this topic that is affecting literally millions of families directly/indirectly (especially in SA,Asia,UK,etc)
Oh and you can always just say your just being crazy it was an issue that happens, it’s important not to be right but to get clarity together on whats going on with what many of us have huge stakes in .