Context: LocalBitcoins is a peer-to-peer marketplace for trading Bitcoins. It is like an eBay for buying and selling Bitcoins. Similar to eBay they provide an escrow service, a reputation system and helps you to find a partner to buy or sell Bitcoins.
What happened? In February of 2017, I receive a phone call that someone wants to buy 7 Bitcoin from me, at the time worth roughly £6,000. This all made sense as I had an advertisement live on LocalBitcoins that I provide such a service.
After we discuss the details of the trade(the exact price I will charge, as this will include a commission above the spot price and the location) we pick an hour and decide to meet thee. We were to meet at Cafe Rouge near Euston Station in London.
About an hour before we were meant to meet the person calls me and asks if it is ok to send his girlfriend as he can't make it anymore. I do not object.
I meet with the girlfriend in the cafe and get a table.
Once we sit down we redo the calculations and proceed with the trade. She gives me the money(£6,000) I count it and I release the Bitcoin from the escrow on LocalBitcoins.
Shortly after out of nowhere a man comes to our table and asks "Miss, are you ok?". They then start hitting and while trying to get the money from me. At one point they managed to get the money and run away. This of course caused a scene in the restaurant and the police arrived shortly on the scene as there is a station 1 minute away.
As the police station was very close they took me there and got my side of the story. Other policemen stayed in the restaurant and interrogated witnesses.
As we are walking to the police station I contacted LocalBitcoins via support tickets and the forum letting them know of what happened. I urged them to block the person's account. This did this and asked for evidence.
The next day I was asked to come to the police station again and the officer in charge of my case asked me detailed questions trying to understand what happened.
As requested by LocalBitcoins I provided them the unique crime reference provided by the police, pictures of the documents I got from the hospital where I got checked, as the police asked me to do so, and the contact details of the officer in charge, which made it very clear that if LocalBitcoins needs to contact him to provide clarifications he is more than willing to do so. They refuse to contact the police and the police contacts them. The officer was nice enough and did as asked.
After this, they said that they need to wait for the investigation to finish until they can proceed further.
Aftermath
A few months later I checked in with LocalBitcoins and they said they need a "notice of asset seizure to the Finnish police"LocalBitcoins is a Finnish company and the incident took place in the UK.
Around August 2017 they contact me and ask again for the case number and the details of the officer in charge stating "As you know, our time limit for freezing the buyer's account is coming up - and we do not want to unfreeze his wallet."
In December I check again and ask for an update and they said: "I'm afraid I cannot give any updates on this, please contact your police investigator."
What do I need help with? I want to get my Bitcoins back. I have evidence of all my claims and never for a second there was any doubt of how the events turned out. But at this moment there seems to be this steal mate where they are saying the Finnish police needs to contact them, even though the Finish police had nothing to do with my situation. I believe the only way to get their attention at this point is by seeking legal action. What is the best way to proceed that will have the highest chance of getting my Bitcoins back?
How does the LocalBitcoins escrow work?
In order to sell Bitcoin on their platform, the seller is required to deposit Bitcoin into his own LocalBitcoins wallet. This is a custodial wallet, meaning that as long as the Bitcoins are in this wallet LocalBitcoins have full autonomy. In normal cases, they do not use this power.
In my case, I posted an advertisement letting people know I want to sell 7 Bitcoins for around £6,000. When the buyer, the other party, clicked open trade the Bitcoins go from my wallet into the escrow. At this moment neither of the parties involved in the trade has control over the Bitcoins. As the Bitcoins are "safe" now the buyer can make the payment. 2 things can happen now:
Both parties cooperate and after the seller receives the money, he will let the escrow know and the Bitcoin will be released to the other party.
One of the parties misbehaves in which case they will be asked to provide evidence of their claims.
LocalBitcoins takes 1% out of the traded volume for offering this service.
Why did I do this trade with cash? Back then the banks were not so friendly with Bitcoin activity as they found it too risky and if they would find out you are using your bank account for Cryptocurrency activity they would shut it down.
Was that not a big sum of money anyway? Yes, it was. I should have never agreed to do such a big trade in one go, but I got greedy.
edit: clarification that the robbers left with the money.
