LocalBitcoins’ approach to bitcoin custody is designed to safeguard and administer customers’ assets in line with the EU Markets in Crypto-Assets (MiCA) regulation. This overview explains, in clear terms, how LocalBitcoins stores and manages bitcoins on behalf of its customers.
Under this service, LocalBitcoins holds and operates customers’ bitcoins for them. LocalBitcoins performs all safekeeping and management activities internally without outsourcing to third-party custodians.
To ensure the highest level of security, LocalBitcoins strictly segregates customer assets from the company's own assets. The vast majority of customer bitcoins are stored offline in highly secure "cold wallets," which protects them from cyber threats and unauthorized online access. Only a strictly limited amount of funds is kept in online "hot wallets" to facilitate the processing of daily withdrawal requests.
The management of these wallets is governed by rigorous internal controls. We enforce a segregation of duties and multi-person approval processes, ensuring that no single individual can unilaterally access, transfer, or compromise customer funds.
The safety of your assets is our priority. In accordance with the MiCA regulation, LocalBitcoins is liable to its customers for the loss of any crypto-assets or the means of access to the crypto-assets (such as private keys) held in our custody, provided that the loss results from an incident attributable to the provision of our services or the operation of our systems (including cyber-attacks or technical malfunctions). Please note that our liability does not cover losses resulting from an abnormal and unforeseeable event outside our reasonable control, the consequences of which could not have been avoided despite all due care (force majeure).
Do you have any questions about bitcoin custody and management? Please contact our customer support.