Monero is a cryptocurrency that aims to be more anonymous than Bitcoin, and has become a recent favorite of the online drug trade. Unlike Bitcoin transactions, Monero trades aren't plainly viewable on a public ledger. But to purchase Monero, you may have to first use Bitcoin, leaving a clear digital trail.
What if you could buy Monero offline, with cash, in a public place like a library or a restaurant? That would make Monero transactions much more anonymous, save for the person you're meeting.
A new site called LocalMonero—its launch was announced on Friday on Reddit—facilitates these types of transactions between people all over the world. While the site's founders are based in Hong Kong, listings offering Monero for cash from all over Canada, the US, the UK, and the United Arab Emirates, have already popped up on the site. The site also allows users to use bank transfers or other payment methods, if they wish.
LocalMonero is inspired by the long-running site LocalBitcoins, which also facilitates cash transactions for Bitcoin. However, LocalBitcoins tracks visitors' IP addresses, which can reveal their location, and requires an email for sign-up. Other methods of trading Monero, such as on a cryptocurrency exchange, may require you to reveal your identity. According to one of LocalMonero's founders, whom I interviewed via encrypted chat and who goes by "Alex," their site does none of this.
"Monero's defining feature is privacy, so going through ID/address verification kind of nullifies the point of using Monero unless you're just using it as a speculative asset," Alex wrote to me. "There's no point for us to collect more information than we need to run the platform. And Monero users will value that more than most."
When Monero is mentioned, drug markets on the darknet aren't far behind. This is because of its privacy-boosting features. There is a public blockchain, but transactions are obfuscated. One-time addresses are the default for transactions and newly sent funds are mixed in with old ones to hide their origin. It's worth noting that researchers have claimed that it's possible to de-anonymize some Monero transactions. Last year, AlphaBay, one of the biggest drug markets at the time added Monero as a payment option.
Several people in the US have been charged or pleaded guilty this year alone for selling large volumes of Bitcoin in person
Alex said that he doesn't want LocalMonero, and Monero itself, to be associated with crime. He simply believes that Monero is better than Bitcoin and that a local option to buy the currency was needed since Bitcoin already has one. Monero could be used for "literally everything money is used for today," he wrote.
The LocalMonero site encourages users to stay on the level, legally speaking. Its terms of service admonish users living in regions where selling large amounts of cryptocurrencies offline may be considered a crime, such as New York State in the US, and Hong Kong. Several people in the US have been charged or pleaded guilty this year alone for selling large volumes of Bitcoin in person (The LocalMonero team is based in Hong Kong, Alex said, but it discourages local trades there and its servers are based outside of the region, but Alex didn't elaborate on where.)
While Alex and the rest of the LocalMonero team are currently anonymous, if the site takes off, they will reveal their identities, he said.
"We're not trying to be a shady platform for darknet market vendors to cash out," Alex wrote to me. "We intend to be mainstream. And for us to be respected [in the] mainstream we understand that we can't be anonymous."
But, like most things in the world of cryptocurrencies, there's always the chance that the whole endeavor could go belly-up, even if the reasons why aren't immediately apparent. "If, however, for whatever reason the business fails—we don't intend to de-anonymize," Alex wrote.
In that case, the LocalMonero founders will simply fade back into the ether, like a Monero transaction conducted with cash.
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