LocalBitcoins Halts Service in Germany amid Licensing Requirements Uncertainty

CoinDesk reports that LocalBitcoins, one of the more popular traditional services for users looking to Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term bitcoins, has suspended its services in Germany:

https://t.co/byGAoG3WSI won't be available in Germany anymore due to regulatory reasons. We hope this is temporary. Press enquiries via email — LocalBitcoins.com (@LocalBitcoins) December 8, 2014

Founder Nikolaus Kangas told CoinDesk that the company was contacted by BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht), the country's financial supervisory authority. The company may need some sort of licensing to operate which it does not yet have. The exact nature of such licensing remains unclear, and the company's lawyers advised that it suspend operations in the country until the issue is sorted out.

One method of exchange on LocalBitcoins is to simply carry out the transfer in person, for which the website functions solely as an advertising service. However, it also offers an online banking option, which may be the area catching regulators' attention if money transmission is involved.

Kangas noted that the development is particularly unfortunate to take place in Germany, where the company reportedly services 8000 active users. Furthermore, "The roots of this service are actually partly in Germany, so it is kind of ironic and sad that we cannot offer the service there anymore."