The original P2P model closed in 2023 under regulatory pressure. If you are building one now, the compliance layer is the product decision.
LocalBitcoins shut down in early 2023. Its model — person-to-person trades with light identity requirements and a very wide range of payment methods — is the part worth understanding before you rebuild it.
The trading mechanics are straightforward and covered elsewhere on this site. What determines whether a P2P marketplace survives now is what sits around them.
What changed
The pressure did not come from the trading engine.
- Identity requirements moved from optional to expected
- Transaction monitoring became something regulators ask to see
- Payment providers began declining P2P flows without controls
- Banking relationships got harder for venues with weak KYC
What a P2P venue needs now
The controls that make the model defensible rather than merely functional.
- Tiered KYC with limits attached to each tier
- A document review workflow with an audit trail
- Every trade, deposit and withdrawal in one auditable view
- Role-based access, so reviewers are not administrators
- Account suspension and restriction where monitoring flags something
What the software will not do
Stated because this is exactly the search where it matters.
- It will not obtain your licence or registration
- It will not run your AML programme or employ your compliance officer
- It will not screen sanctions lists — it integrates with providers that do
- It gives you the controls and the record; the programme is yours
The trading side, briefly
Well understood, and unchanged.
- Escrow on every order, released on confirmation
- Dispute flow with order chat and admin oversight
- Merchant verification and reputation
- Payment methods configured per market
Own it outright
A clone in the marketplace sense is a copy you rent or cannot read. This is the opposite arrangement.
- Complete source code, with no encryption and no obfuscation
- Deployed on infrastructure you control
- No recurring licence, and no vendor approval needed to change how it works
- $24,900 one-time for the Full Suite, with deployment and six months of support
Rebuilding the model under current rules
| What you need | How it works here |
|---|---|
| Identity checks that scale | Tiered KYC with limits per tier and a review queue |
| An audit trail | Every trade, deposit, withdrawal and transfer in one view |
| Separation of duties | Role-based admin access; reviewers separate from administrators |
| Sanctions screening | Provider integration — the platform does not replace a screening vendor |
| Escrow and disputes | Escrow at order open, dispute flow with chat and admin oversight |
| Wide payment methods | Configured per market, without a code change |
Questions you might have
Why did LocalBitcoins close?
It announced closure in early 2023, citing a difficult market. The regulatory environment for lightly-verified P2P had changed considerably by then.
Can a P2P exchange be compliant?
Many operate under registration or licence today. It depends on your jurisdiction and your programme, neither of which is a software question.
Does this include sanctions screening?
It integrates with providers who do that. We do not supply screening data.
How is this different from the Paxful page?
That one is about escrow and dispute mechanics. This one is about the compliance layer that decides whether you can operate at all.
Can we launch before we are licensed?
That is a question for a lawyer in your jurisdiction, not for us. What we can say is that retrofitting verification and audit trails onto a live platform is worse than starting with them.
See the stack behind the comparison
A private demo walks the platform with someone who deploys it. Bring the feature list you started with and check it off live.