Finnish p2p bitcoin trading platform LocalBitcoins is advising its users not to use free and open-source software for enabling anonymous communication called Tor.
Using a Tor browser is not against LocalBitcoins' Terms of Service, even though it is has not been recommended for security reasons.
— LocalBitcoins.com (@LocalBitcoins) September 10, 2019
The motivation for the message is currently uncertain; the company executives have not provided comments yet. The screenshot was posted on Twitter by Richard Bensberg who is a transaction compliance expert, where it quickly received the feedback of other users. According to most comments, the warning unfairly evaluates Tor's qualities, as other browsers like FireFox are vulnerable as well.
Tor is short for The Onion Router and was initially a worldwide network of servers developed with the U.S. Navy that enabled people to browse the internet anonymously. The Tor network disguises your identity by moving your traffic across different Tor servers, and encrypting that traffic so it isn't traced back to you. The company claims it has no choice but to request data in order to continue to operate in jurisdictions such as the European Union, which places high demands on AML and KYC rules.
However, representatives of TOR say that the security threat is overstated. In June, the platform announced that each user should provide personal information in order to trade, which, according to many, is contrary to the ideas of Bitcoin itself. Threat actors or nation-states looking into degrading the performance of the Tor anonymity network can do it on the cheap, for only a few thousand US dollars per month, new academic research has revealed.