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So eventually those sellers on the platform have to comply with "know your customer" rule and collect ID document from buyers. But I think localbitcoins just do escrow service, thus not directly related to money transfer, should not be regulated
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I don't think that LBC will ever force their customers to go through KYC/AML verifications with them directly for that exact reason (they are only an escrow service). It has been ruled/determined that someone running an escrow service does not qualify as a money transmitter and will not be regulated as such. The seller of bitcoin on the other hand technically is a money transmitter and should comply with KYC/AML rules, however they rarely do (AFAIK)