LocalBitcoins

LocalBitcoins is a global peer-to-peer Bitcoin exchange based in Finland that has embraced AML regulations. When the Finnish Parliament passed AML virtual currency regulation, LocalBitcoins made a blog post saying this would “[create] a legal status for crypto assets, which should improve significantly Bitcoin’s standing as a viable and legit financial network.”

A few months later, LocalBitcoins removed the option for users to make in-person cash trades. A few weeks after that, they announced the launch of their new verification system which was the result of their partnership with Onfido, “a leading identity verification technology provider.” Eventually the verification requirements were increased until even simply receving Bitcoin or creating ads required full KYC verification.

In the Spring of 2020, surveillance corporation CipherTrace published a report which in part stated that a significant amount of tainted coins were traded traded through LocalBitcoins:

Finnish exchanges ranked #1 in highest percentage of criminal BTC received , with 12.01% of all BTC funds received coming directly from criminal sources. Finland-based LocalBitcoins, one of the largest peer-to-peer marketplaces, received over 99% of these criminal funds.

On July 28, 2020, LocalBitcoins announced their partnership with surveillance corporation Elliptic to “prevent the illicit use of its platform and comply with regulations.”