In an unusual turn of events, the digital currency peer-to-peer network LocalBitcoins has unexpectedly shut down user accounts in several regions, including Asia, the Middle East and Africa. At issue is the fact that impacted customers did not receive any prior notice of the actions.
As a result, many customers have reported that they have not been able to access their accounts to withdraw digital currency, even though some have reported receiving messages from the exchange indicating that they should “withdraw bitcoins by deleting account”. Forbes earlier reported that the mass shutdown of accounts is impacting users in Afghanistan, Iraq, Nigeria, Syria and Pakistan.
There is some speculation that these events are a result of the implementation of the new Fifth European Anti-Money Laundering Directive (AMLD5) that came into effect on January 10. Given the countries impacted, it would seem logical that restrictions are being put in place for high-risk countries in AMLD5, though one would have expected a communications plan to help users return their funds in an efficient manner. It will be difficult to assess who will be responsible for users funds if accounts are simply locked, suspended or deleted.