16 mins

to approve a customer for LocalBitcoins

getting customers to experience value sooner

countries from which customers have onboarded

allowing LocalBitcoins to have a global reach

LocalBitcoins is the world's leading peer-to-peer bitcoin marketplace based in Finland. They enable users around the world to trade bitcoin quickly, easily and securely through over-the-counter trading of local currency in exchange for bitcoin.

The challenge

In 2019, KYC compliance became mandatory in Finland. Elena Tonoyan, COO at LocalBitcoins, was tasked with finding a solution to help the company become compliant while also combating fraud. At first, the LocalBitcoins team tried to build an identity verification tool internally, but it quickly became evident that this would require too many resources and would not scalable as they grew. Tonoyan then decided to look at external vendors to solve their issue.

LocalBitcoins is on a mission to promote global financial inclusion, connecting everybody to the Internet Economy through Bitcoin. Operating in a number of countries without easy access to global financial systems, LocalBitcoins is, for many, the only way customers can access digital currencies and global financial systems.

Cryptocurrency trading is still a relatively new space, and is growing at an increasingly fast pace. So getting more people onboard and offering them new ways of using bitcoin are key goals for LocalBitcoins.

And to stand out from the crowd, LocalBitcoins positions itself as the most secure and user-centric cryptocurrency platform on the market. Get security wrong and customers could lose their assets. Knowing their customers is therefore vital, both in terms of KYC requirements and preventing fraudsters from accessing the platform.

LocalBitcoins needed an identity partner that could help them balance these different goals. They had to meet KYC requirements, stop fraud and ensure their sign-up was seamless for new customers.

Onfido not only helps us with KYC compliance but also with fraud. Fraud begins with onboarding so if we can stop it at that point, it makes our lives much easier.

Elena Tonoyan, COO at LocalBitcoins

The solution

The LocalBitcoins team selected Onfido as their identity verification provider due to the solution’s ability to scale while reducing customer acquisition costs and preventing fraud. The team is currently using Onfido Known Faces, which provides a liveness video, selfie, and document check. Known Faces automatically compares faces in selfies and videos against those that have previously passed through LocalBitcoins’ onboarding system, and flags if the face has been seen before — giving them additional defense against sophisticated repeat fraud. With Onfido, LocalBitcoins has been able to create a smooth and seamless onboarding experience for new users while remaining KYC compliant. With the help of Onfido’s coverage of over 4,600 documents worldwide, LocalBitcoin has been able to onboard and verify customers from 189 countries.

In the world of cryptocurrency, security is our number one concern. LocalBitcoins is known in our market as the most secure marketplace out there. Onfido plays a big part in that, giving us confidence that our users are genuine at any stage in their journey with us.

Elena Umanets Head of Investigations at LocalBitcoins

Interested in learning more about the Real Identity Platform?

Our interactive product tour walks through building drag-and-drop workflows in Onfido Studio, all the features of our Verification Suite, and the brains behind everything — Atlas™ AI.

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