P2P Bitcoin Market, LocalBitcoins, Sees 10% YoY Revenue Jump Despite Competition and Regulations
The peer to peer (P2P) cryptocurrency exchange, LocalBitcoins, announced its annual revenue reports disclosing a 10% increase in the past year. The crypto marketplace, which has witnessed increase competition from Paxful and the recently-launched Binance P2P platform, recorded €26.2 million ($29.48 million) in annual revenue in 2019.
The report also released the annual operating income, which witnessed a slight 6% drop from €18.8 million ($21.15 million) to €17.6 million ($19.8 million). According to the CEO of LocalBitcoins, Sebastian Sonntag, the income reduced due to the implementation of KYC/AML compliance rules, which would have driven “bad actors” away.
“As expected, undesired activity was driven away from the platform, and the implementation of KYC itself was a challenging process. Despite these, we were able to deliver growth and excellent earnings.”
The total employee headcount on LocalBitcoins also skyrocketed from 26 in 2018 to 43 employees in 2019, a 65% increase in a year.
The platform’s market growth is also exceptional, with 1.46 million customers joining the platform over the past year. The platform registered over 15.6 million trades on the platform, with €2,48 billion worth of BTC trades completed. A total of 913,000 active customers visited the LocalBitcoins P2P platform during the year.
Anti-Money Laundering compliance
2019 was the baptism of LocalBitcoins as the platform started its switch to being a fully KYC/AML compliant entity. After introducing the KYC/AML measures to reduce illicit activity conducted on the platform, the platform locked access to Iranians, citing regulatory compliance issues.
The removal of the in-person cash option fully certified the team’s commitment to being a fully compliant platform. Despite a period of low volumes after the announcement, the exchange is back on its growth track as healthy demand and a growing market tilt volumes back to its favor.
A statement to BEG desk reads,
“We have managed to grow our daily new customer sign-ups with over 50% since early 2020 till today — from around 4,000 new daily sign-ups to over 65,000 new daily sign-ups.”
Fight for supremacy
The Helsinki-born BTC marketplace has grown into the largest P2P exchange since its launch in 2012 but is facing a ‘Battle for Supremacy” with the upcoming Paxful. The latter has already overthrown LocalBitcoins in daily volumes recorded in several markets in the Sub-Saharan market, Asia and South America. One spokesperson from Paxful spoke to CoinTelegraph saying,
“When you look at our data, in Africa, Nigeria, Ghana, and Kenya, we lead in terms of volume this year.”
The revenue report of 2020 will be more useful in measuring the impact of Paxful’s competition as recent reports showed the weekly BTC volumes on LocalBitcoins plummeted to a 7-year low.