[nikanj]

I have drugs. I want cash.

You have cash. You want drugs.

You go on localbitcoins and trade your cash for bitcoin (fully legal) and then buy drugs from me via darkweb (fully anonymous).

I sell you the drugs on darkweb (fully anonymous) and then offload my bitcoin on localbitcoin for cash (fully legal). This removes a lot of risk for both parties

This is the original business model, but the authorities caught on pretty quickly and implemented all of those pesky KYC/AML requirements.

[dale_glass]

Not very anonymous unless you're really careful about it and never fail once. The localbitcoins person is linked to everyone they interacted with, and the transactions are public and timestamped. Unless you use a new address every time, your identity can be deduced fairly easily from your other activities.

The probable result is that the police nab the localbitcoins person, then pressure them to explain who they were doing business with, and go from there.

If anything it's worse than buying drugs in a dark alley because there's a permanent record of your activity.

[luckylion]

Sure, but that's not money laundering, that's just buying drugs.