There are lots of news regarding localbitcoins.com seller arrest against money laundering laws. I know it is seller or buyers responsibilities to follow their local AML laws. But how localbitcoins founders are safe from any prosecution even their website is intentionally used as money laundering hub in different countries? What kind of legal loopholes they uses to avoid any legal action against them? Why countries like usa not just shut down localbitcoins service so nobody abuse their service for money laundering and tax hiding like Germany?
The developers of the site localbitcoins.com are providing a service that is not itself illegal. They explain their service and its limitations in their Terms of Service (my emphasis):
All trades on this site are concluded solely between users of the service, and while LocalBitcoins.com may help in resolving disputes between the parties, it does not itself become a party to such transactions, contracts or relationships. LocalBitcoins.com is not a Bitcoin marketplace but a service enabling its users to set up markets for peer-to-peer exchange by way of creating advertisements for trades directed to other users.
Until local or national jurisdictions decide that people advertising to conduct person to person crytpocurrency trades are illegal, the site is legal. Some users of the site may be evading taxes or laundering money, and those could be crimes in jurisdictions, but if so, those crimes are perpetrated by the individuals that have contacted each other through the site, and not the site developers or owners themselves.