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Major Spike In LocalBitcoins Trading Activity Could Be Due To Scams & Fraud

Last Updated March 4, 2021 4:44 PM
Justin OConnell
Last Updated March 4, 2021 4:44 PM

localbitcoinsJust last weekend, LocalBitcoins set its weekly record trading volume. Across disparate regions, there seems to be a unifying trend: volume is increasing on LocalBitcoins. 

But this has left some wondering: how much of this trading volume is due to fraud? Most of the transactions done on LocalBitcoins are not done via peer-to-peer cash transactions, but instead on transactions based around intermediary financial institutions. Does this mean that more and more people are dealing in bitcoins by depositing money in other individuals accounts?

Nonetheless, it appears on LocalBitcoins, at least, Bitcoin trading has been on the rise in 2015. This in light of many former users saying that once they do a few transactions with a trusted source they met on LocalBitcoins, they remove the transactions off the website.


In many key countries, trading is on the rise in 2015. For instance, in Argentina, where economic uncertainty has brought fears of yet another episode of inflation, trading has spiked at certain points in 2015:


In Russia, where Bitcoin has been ruled illegal, trading on LocalBitcoins increases.


In Sweden, a similar trend:


Australia, where law enforcement has paid especially close attention to cryptocurrency, trading on LocalBitcoins is on the rise:


In India, a similar trend:


LocalBitcoins has had history of fraud and scam issues, and the problem continues to this day. A recent spike in trading volume on the website in South Africa might spawn optimism for the currency in another under-developed economy.

But, it appears there is something a bit more sinister tied to the increase in trading activity. While few details are known, and it is not for sure, it appears the increase can be tied to fraudulent activity.

Bitcoin Charts is showing a marked increase in trading activity in South Africa on LocalBitcoins. Although it would be nice to think this is because more people are finding every day uses for Bitcoin, the spike is dramatic, and it is possible the situation begs for a more detailed explanation. Here is the website’s LocalBitcoins (ZAR) chart:


Similar is being seen on Bitx:


Many are contending that there has been an increase in money scams in the region, and LocalBitcoins is suffering the consequences. As can be seen here, no in person trades are currently available on the main page of the website:


According to one Reddit user :

There is a ponzi that is gaining popularity over there, which has caused us to be extra-wary of trading with South Africans at the current juncture. This ponzi was unrelated to bitcoin (shocking, I know) until just recently when the ponzi operators decided to start taking BTC instead of fiat for payments into the scheme. IMHO, this is causing the massive price discrepancy over there.

We’re not about to give them any extra publicity so don’t ask for a name or a link. Fuck ponzis… google it yourself if you are so inclined.

PSA: if someone promises you super high yield returns for your “dream donation” it’s bullshit. Anything too good to be true, IS too good to be true.

The commenter did not respond to CCN.com for further comments.

Another user wrote seemingly unsurprised by the notion that there was a scam on LocalBitcoins.

If any one asks you for money or bitcoins/litecoins from South Africa it’s a scam, now there will be a lot more scams created. Simple rule never give money to stranger.

To be sure, this sort of behavior is not uncommon for LocalBitcoins, as the website has provided an entire forum devoted to warning about scammers. The forum is updated with nearly daily warnings.

For this reason, Cryptocoins News wants to take this opportunity remind everybody in the space to use the utmost precaution when dealing in bitcoins, and to use escrow whenever possible, and only when dealing with people you know and trust is no option.

With that said, the notion of peer-to-peer Bitcoin transactions is truly at the heart of the Bitcoin network, and LocalBitcoins has certainly been one of the most important websites for the development of Bitcoin.

Have more security advice? Let us know in the comments.