Localbitcoins Compensates Users by Selling Bitcoin Cash for BTC

Over the past few weeks, many Bitcoin Cash (BCH) supporters wondered when the peer-to-peer trading platform Localbitcoins would release BCH funds to users who left bitcoin on the exchange before the August 1 split. On September 25 the organization revealed it sold the BCH funds and will be compensating users in bitcoin.

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Localbitcoins Sells Bitcoin Cash That Was Left on the Exchange and Compensates Users With Bitcoin

The bitcoin exchange Localbitcoins is a business based in Helsinki, Finland, that offers a web portal for nearly every city worldwide where users can participate in over-the-counter bitcoin trades. The company was founded in 2012 and has since been a favorite trading vehicle for bitcoin proponents across the globe.

Since the hard fork that produced bitcoin cash, many individuals wondered if Localbitcoins would compensate people with BCH if they held bitcoin there before August 1. Some even talked of threatening the company with a lawsuit because Localbitcoins didn’t mention a plan for after the fork. According to the company, BCH will not be supported by the organization, but they have sold the BCH balances and have credited users with BTC.

The startup details that the BCH held on Localbitcoins was sold and “credited to customers at its corresponding value.” All of the BCH funds left on the exchange were converted to bitcoin (BTC), and the company says open trades were also considered.

“Open trades that had any balance at the time were also taken into consideration, based on who received the Bitcoin after the trade was completed or closed,” explains Localbitcoins.

Bitcoin Cash Supporters Believe Localbitcoin’s Statements Were More Like “Trolling” Than an Announcement

Bitcoin Cash supporters were not pleased with the startup’s announcement telling the public they up and sold people’s BCH funds without asking. Further, the blog post references the digital currency as “Bcash” numerous times throughout the blog post and many supporters viewed this as a taunt. According to BCH supporters, the entire announcement was very “troll-like” and condescending towards the fork.

Future Cryptocurrency ‘Air-Drops’ Will Not be Supported by Localbitcoins

Localbitcoins says there will also be a processing fee for the BCH to BTC conversion of 0.0002 BTC per account. Anyone who was eligible for compensation was already paid, explains the exchange’s blog post. The startup also emphasizes that this type of compensation won’t likely happen again; which might be in reference to the upcoming hard fork coming this November.

“You should not expect any previous or future cryptocurrency air-drops to be compensated or supported by LocalBitcoins,” explains the peer-to-peer trading platform.

What do you think about Localbitcoins selling Bitcoin cash (BCH) for bitcoin (BTC) and compensating users that way? Let us know what you think in the comments below.

Images via Shutterstock, Bitcoin Cash, and Localbitcoins.

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