Buying and selling Bitcoin on LocalBitcoins allows traders to communicate and offers a wider range of payment options than other cryptocurrency exchanges. For this reason, many people prefer using the site to other more common forms of centralised cryptocurrency trading platforms.
The issue is that keeping track of Bitcoin trades over a tax year is complicated; factor into this cost basing rules and fees, and suddenly, reporting your Bitcoin taxes becomes a nightmare.
Luckily, this is what Cryptiony was designed for. And in this article, we will show you how to turn your tax nightmare into an automated dream.
LocalBitcoins is a Bitcoin exchange platform which allows users to buy and sell Bitcoins in a peer-to-peer environment. It is not the P2P that Satoshi Nakamoto envisioned when creating Bitcoin, as the exchange is custodial. Still, it does not feature an order book and is much more flexible than other cryptocurrency exchanges.
The most proficient way to calculate your LocalBitcoins taxes is with the automated Cryptiony integration. Simply hook LocalBitcoins up to Cryptiony, and we will do the rest.
But apart from saving time and money, what else do we offer?
Good question. We are crypto-native and have incorporated all current cryptocurrency tax regulations into our software. This means we ensure your tax return is fully compliant with all tax laws, something most accountants would struggle to guarantee.
The easiest way to get started with Cryptiony is via an API connection to LocalBitcoins. To do this, you first need to generate API keys on LocalBitcoins and then input them into our platform.
Generate your LocalBitcoins API Keys
Log in to LocalBitcoins.
From the LocalBitcoins dashboard, click the profile icon, then profile.
Select API key from the section on the left. Then create new API.
Enter your name and complete the 2FA.
Select read only, then save your API key and API secret for the Cryptiony integration.
Import your Transactions
Sign up for Cryptiony.
From the Cryptiony dashboard, click transactions, then add transactions.
Select LocalBitcoins, then integrate with the exchange API.
Input your LocalBitcoins API keys into Cryptiony and click integrate.
Once your transactions are imported, you can either import transactions from another exchange or head over to the Taxes section to generate a report.
Although the API method is more straightforward, there are still times you may need to import a CSV.
How to Download LocalBitcoins Transactions
Log into your LocalBitcoins account.
Click wallet, then spot wallet.
Next, select transaction history, then export history.
Enter your date range and click export to CSV.
Repeat, but click order history instead of transaction history.
How to upload LocalBitcoins transactions to Cryptiony
Log in to Cryptiony.
From the dashboard, select transactions, then add transactions.
Click integrate the exchange on the top right of the screen.
Select LocalBitcoins, then import the transaction file.
Select your Cryptiony transactions CSV files and hit import.
Yes, LocalBitcoins requires customers to complete KYC identity checks. It uses the identity verification service Onfido to facilitate checks.
LocalBitcoins offers a wide range of payment options, including GBP. Moreover, users can even pay for Bitcoin with cash through LocalBitcoins.
It is likely your LocalBitcoins earnings will be attributed to capital gains tax, but there are a couple of potential exceptions for this; for example, if HMRC regards you as a “professional trader”, they could be subject to income tax. Check out our UK crypto tax guide to learn more about this topic.
Yes, UK citizens can use LocalBitcoins, and it is one of the most flexible ways to on and off-ramp into Bitcoin.