LocalCryptos is a peer-to-peer marketplace that lets you trade crypto directly with other investors. The platform makes it easy to connect with buyers and sellers of 5 top coins and it offers a non-custodial escrow system to protect you during each transaction.
But is LocalCryptos safe? Is it worth using?
In this LocalCryptos review, I’ll investigate precisely what the marketplace has to offer. I’ll explain how the marketplace and its escrow system work, what payment methods you can use, and what fees you’ll pay when you trade on the platform.
Advantages & Disadvantages
- No identity verification required.
- Supports cash payments.
- Uses a non-custodial escrow system.
- User-friendly interface that’s easy to navigate.
- Compares all buy and sell offers to a coin’s current market price.
- No option to buy crypto using other cryptocurrencies.
- Doesn’t support credit and debit card purchases.
- Offers minimal information about individual sellers on the marketplace.
- Higher fees to respond to listings than on other platforms (0.75% fee).
What is LocalCryptos?
LocalCryptos (previously LocalEthereum) is an Australia-based peer-to-peer (P2P) crypto trading platform that was founded in 2017.
It was founded to create a secure marketplace where traders could buy and sell crypto “without counter-party risk by using a trust-less escrow concept.” The LocalCryptos platform operates using a smart contract-based escrow system to facilitate trades between investors.
There’s always a risk when you trade on a P2P marketplace like LocalCryptos.
However, LocalCryptos has never had a successful hacking attempt. This doesn’t mean that the platform is 100% foolproof, though, as a bug in the platform’s escrow smart contracts system could cause some serious issues.
Ultimately, the safety of trading on LocalCryptos requires that you choose reputable partners to trade with and that you secure your funds in a personal wallet. LocalCryptos provides a free non-custodial wallet, but a personal hardware wallet is usually the best choice.
The legality of LocalCryptos depends on the laws in your country of residence.
LocalCryptos is an Australian company and, as such, it has to comply with Australian law. But, it doesn’t have offices in the UK and it’s not registered with the FCA (Financial Conduct Authority).
That said, LocalCryptos is a P2P marketplace, not a broker. It doesn’t actually handle money. The firm basically just matches buyers and sellers of crypto.
The legal issues with P2P marketplaces usually arise when you sell crypto. If you’re doing so as a business, you might need to register as a financial business in your country of residence.
If you’re concerned about the legality of LocalCryptos, seek out advice from an expert in financial law in your area.
LocalCryptos is a major name in the P2P crypto trading industry, but is it worthy of your trust?
The company currently has a 4.0* rating (200+ reviews) on Trustpilot. This is a high rating, though this is based on a relatively small number of reviews.
Over 70% of reviewers give LocalCryptos a 5* rating. Many reviewers mention the user-friendliness of the platform and its low trading fees.
Meanwhile, most of the low rating reviews on Trustpilot come from people who have had issues with getting funds released from escrow or with having their accounts banned.
So, what does this all mean?
If you want to use LocalCryptos, be cautious when vetting sellers. Start with small transactions until you gain confidence with the platform and always be willing to walk away from bad situations.
How Does LocalCryptos Work?
LocalCryptos is a peer-to-peer marketplace where you can trade top cryptocurrencies directly with other investors.
There’s no middleman between you and your trading partner like there is when you trade on an exchange or with a broker. With LocalCryptos, you’re solely responsible for finding and vetting trading partners that are selling coins at a price you’re willing to accept.
Creating an account with LocalCryptos is about as easy as it gets.
All you have to do is go to the LocalCryptos website and click the button to sign up.
You’re given the option to sign up using an email address or an Ethereum wallet, like a Ledger Nano S. But LocalCryptos recommends signing up with an email address and password. Once you sign up, you simply need to confirm your email address and you’re off to the races.
One thing you’ll notice when you sign up is that LocalCryptos reminds you multiple times that customer support cannot recover your password if you forget it.
This has to do with the encryption that LocalCryptos uses, which makes it impossible for customer support to see your login credentials. Moral of the story? Don’t lose your password.
But other than that, there’s no identity verification process when you create an account.
If you want to buy crypto on LocalCryptos, you first need to find a seller.
To find sellers on LocalCryptos, first navigate to the marketplace.
Then, you can select:
- What cryptocurrency you want to buy.
- Which country you want to find sellers in.
- How much you want to spend and in what fiat currency.
- Your preferred payment method.
After you see all the available listings, it’s time to vet potential offers. Finding a reputable seller is your responsibility, but LocalCryptos gives you some information in a seller’s profile. As you search, look for the following in a seller:
- Feedback Scores: Look for sellers with a feedback score of at least 95%.
- Length of Time on Platform: Opt for trading partners that have been on the platform for a long time (at least 1 year).
- Number of Trades: Consider partnering only with sellers that have at least 100+ confirmed trades.
- Trading Volume: Stick to trading partners that have at least $10,000 in total trading volume.
- Account Verification: It’s best to work with sellers that have verified their email address and phone number.
- Top Rated: Sellers that are top-rated usually have a good track record of successful transactions.
LocalCryptos doesn’t provide nearly as much information about sellers as some other P2P platforms do. So, tread with caution and always be willing to back out if you feel like things aren’t going the way you expected.
Unlike many other P2P platforms, LocalCryptos never physically manages funds that you place in escrow. Rather, LocalCryptos uses a non-custodial blockchain-based escrow system that operates on smart contracts.
The technical details of how this works are too complex to get into here, but it’s pretty cool.
But here’s what happens when you open a trade with a seller:
- The seller places their crypto into escrow (i.e., into the smart contract).
- You pay the seller.
- The seller confirms receipt of payment.
- Your crypto is sent to your destination wallet.
If the seller doesn’t confirm your payment, you can raise a dispute. A LocalCryptos moderator will then contact you via the dispute chat platform.
They try to help you through your transaction issue. Note that the moderator may ask for proof that you sent your payment as they help you with your dispute.
LocalCryptos doesn’t have an official list of supported countries.
However, it claims that it supports traders in more than 100 different countries, including the UK and the bulk of the European Union.
The company isn’t transparent about who can and cannot use the platform.
There are reports that you can’t use LocalCryptos if you’re from the US, but this doesn’t seem to be the case. I know of traders who have made accounts from the US with no issue.
LocalCryptos currently supports 5 coins, including:
- Bitcoin (BTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
- Dash (DASH)
The firm seems to add new coins somewhat regularly, so they may support more cryptocurrencies in the future.
Traders have a choice between more than 40 payment methods on LocalCryptos. But, only a fraction of these payment methods are available to you based on your country of residence.
The company differentiates between so-called domestic and international payment methods. In the UK, domestic payment methods include:
- UK bank transfer (via FPS)
- In-person cash
- Cash deposits
UK investors can also access the following international payment methods:
- SEPA Transfer
- Western Union
There is no option to buy crypto using a credit or debit card. Additionally, there is no option to do a crypto-to-crypto trade on LocalCryptos.
Fees on LocalCryptos operate differently than what you’d find on an exchange like Coinbase.
Let’s dig into it.
Crypto Exchange Rates on LocalCryptos
Anytime you buy crypto on LocalCryptos, you’re purchasing directly from another trader. Therefore, the price of your crypto depends on what someone is willing to sell it for.
Most of the exchange rates you’ll find on LocalCryptos are higher than what you’d get if you purchased on an exchange. But this is to be expected on a P2P marketplace.
One thing I really like about LocalCryptos is that it shows you how much higher an offer’s asking price is above a coin’s market rate.
As you can see below, some traders offer rates that are about 3% above market value on Bitcoin (BTC) while others offer not-so-competitive rates that are 40% above market value. Yikes!
If you create an offer listing, you’ll pay a 0.25% fee for each transaction. Meanwhile, if you respond to an offer listing, you’ll pay a 0.75% fee on your order. (Find out more here).
There are no deposit or withdrawal fees when you send funds to your LocalCryptos wallet.
However, you will need to pay any network fees associated with withdrawals or deposits to your wallet – or to the escrow system.
There are no limits on how much crypto you can buy or sell on LocalCryptos. However, there are limits on how many listings you can post at once.
For domestic payment methods (e.g., UK bank transfers, in-person cash, or cash deposit), you can have no more than 2 offers with the same country, payment method, and type (i.e., buy or sell).
For example, you could have:
- 1 offer in the UK to buy BTC with in-person cash
- 1 offer in the UK to buy ETH with in-person cash
However, you can’t have another buy offer in the UK for in-person cash on any other currency. But, you could make a third buy offer in the UK for BTC with a UK bank transfer.
LocalCryptos is a security-focused platform.
Its primary security-related feature is the fact that it’s a non-custodial P2P marketplace. This means that the company never has access to or control over your private keys or any trades that you place with other users.
The LocalCryptos website and its wallets are also all end-to-end encrypted with AES-256 so you are the only one who can access your private keys—so long as you keep your account secure using a strong password and 2-factor authentication.
Additionally, LocalCryptos’ escrow service is non-custodial. Unlike the escrow services at other P2P platforms, LocalCryptos never comes into contact with your funds. The entire escrow system is decentralized and it operates using smart contracts on the blockchain.
That being said, LocalCryptos specifically states that they solely “provide you the reputation marketplace and self-custodial crypto wallet, however, you’re on your own, so be on the lookout for fraud”.
LocalCryptos vs LocalBitcoins
LocalCryptos’ biggest competition is LocalBitcoins.
LocalBitcoins is one of the world’s oldest crypto marketplaces and it garners much of the P2P trading volume around the world. However, while there are quite a few similarities between the LocalCryptos and LocalBitcoins platforms, there are also many differences.
Here’s a table that provides a quick overview of the differences between LocalCryptos and LocalBitcoins:
|Supported Cryptocurrencies||BTC, ETH, BCH, DASH, LTC||BTC|
|ID Verification Required||No||Yes|
|Major Payment Methods (UK)||- UK bank transfer|
- SEPA transfer
- Western Union
- In-person cash
- Cash deposit
|- UK bank transfer
- SEPA transfer
- Western Union
- Credit and debit card
- Crypto transfer
|Create Buy/Sell Listing Fee||0.25%||1%|
|Respond to Buy/Sell Listing Fee||0.75%||0%|
|Trading Limits||None||Yes (based on verification tier)|
For a more thorough overview, check out my LocalBitcoins review.
Another alternative to LocalCryptos is Paxful.
With Paxful, you can trade Bitcoin (BTC) and Tether (USDT) using more than 300 payment methods – including cash and even gift cards. Paxful also doesn’t require any identity verification. But fees vary between 0.5% and 5% to sell crypto on Paxful.
For more information, check out my Paxful review.
Another option that you have is Bisq.
Bisq is a decentralized P2P platform (with no identity verification). You can also access a much wider range of cryptocurrencies with Bisq. The downside is that Bisq doesn’t have great dispute mediation because it’s completely decentralized.
The Bottom Line
LocalCryptos might not get as much traffic as other P2P marketplaces, but it offers a lot to appreciate.
These are some of the key features that I like about LocalCryptos:
- Non-Custodial Escrow: The escrow system on LocalCryptos is non-custodial so no one else can access your private keys.
- Accepts Cash Trades: Cash trades aren’t supported by LocalBitcoins anymore (the main alternative).
- No ID Verification: You don’t need to provide any personal information to set up an account or place trades.
However, there are some things about LocalCryptos that don’t impress.
Most notably, the fees on LocalCryptos are higher than in other places that I’ve reviewed. The company also doesn’t give you much information about sellers during the vetting process.
Head over to their website to learn more.
Thanks for Reading!
Thanks for checking out this LocalCryptos review!
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