Bitcoin

Bitcoin Trade Took a Blow in Iran Due to U.S. Sanctions

Bitcoin, the innovative decentralized digital currency, unfazed and above any central control and financial manipulation, has lost the bet of standing against the political systems of the world. The problem started when users faced issues while attempting to post new trades and update previous ones on LocalBitcoins. When a user inqured, LocalBitcoins responded via email where besides informing about trade ban, the exchange also enlightened on what will happen to the users who already possess bitcoin in their accounts. The respond read:

If you have an account already, you will be able to withdraw your bitcoins, but you will not be able to use the platform for trading.

The people involve in bitcoin trading in Iran are the ones suffering from the current political turmoil since LocalBitcoins, the most popular bitcoin trading website among Iranian users, has stopped Iranians to trade bitcoin on its platform. Although the exact reasons from LocalBitcoins haven’t made it to the surface, LocalBitcoins halting its operations in Iran, is likely due to the country’s political instability.

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Later, LocalBitcoins, an exchange based in Helsinki, Finland, notified about banning trade in the country through their official website. The exchange was a popular choice among Iranians, as it allowed locals to pay directly through their bank accounts, rather than international credit cards. Additionally, LocalBitcoins was favorite among the locals, trading in bitcoin because it provided them a secure and safe way by holding funds in escrow, until both parties in trade hadn’t given confirmations.

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LocaBitcoins halted its operations at a time when its trading volume was on a substantial growth, and is highly affiliated with U.S campaign against Iran. A year ago, U.S president Donald Trump announced sanctions against the Iranian economy after abandoning its support in Iran’s nuclear deal with other major countries. Following the sanctions, several exchanges including Binance, Bittrex and ShapeShift withdrew support for Iran.

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In the past, U.S had pressurized countries and organizations to abide by some strict rules or face penalties otherwise and anyone who violated sanctions have been fined heavily. The British bank, Standard Chartered was alone fined about $1.5 billion for not following orders. Moreover, JP Morgan was fined around $5 million for allegations of violating sanctions. In 2014, the largest ever fine for violating sanctions at that time was $8.9 billion that was paid by French bank BNP Paribas.

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As LocalBitcoins was frequently used by Iranians, the ban had placed obstacles for bitcoin traders. There are alternatives emerging in the country that allow locals to continue crypto trading. One of the several options substituting LocalBitcoins is Bisq, a decentralized crypto exchange that doesn’t follow KYC (Know Your Customer) protocol and supports either, private or anonymous transactions. Hodl Hodl, another option available to the Iranians, is quite similar to LocalBitcoins. Both of these platforms have Farsi language support for public’s ease.

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Although people are turning to other options, the claim that bitcoin is decentralized and not restrained by any country, government or institute has been undermined. Many of the country’s exchanges now providing services in Iran are capitalizing cashing the opportunity by the action of LocalBitcoins. In this regard, KeepChange, an exchange, knocked sanctions and censorship of bitcoin trade replied;

Iranian users, as well as any other nationalities anywhere in the world, can use KeepChange for buying and selling bitcoin without worrying of any kind of censorship, sanctions, money seizures, etc.

The vision behind creation of bitcoin was to enable peer-to-peer transaction without the involvement of any third party. Bitcoin is widely popular for not knowing borders, color or ethnicities and offering global availability is surely up for debate after LocalBitcoins move.

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Ever since the news broke, the focus is entirely laid on the move by LocalBitcoins. CEO of Paxful, Ray Youssef suggested that LocalBitcoins is itself up against its future. Youssef revealed that LocalBitcoins is going to be sold to some other company. According to Youssef’s claim, LocalBitcoins, after creating uncertainties for Iranians, is unsure about its own future. Youssef didn’t disclose to whom would it be sold but he picked some options in a tweet.

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Fatir Malik

Electrical engineer by profession, turned into blockchain developer. Fatir contributes regularly with his insights about latest developments in fintech sector. Contact the editor at editor.opinions@blockpublisher.com

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