Iranian users of Finnish exchange, LocalBitcoins, barred from services following several weeks of increasing competitor trades. US sanctions are also believed to have influenced the move. Stories from local telegram channels reveal that a large number of Iranian users reported issues when posting and updating trends on the platform last week.
#localbitcoins response to an Iranian user has circulated via social media and local news websites recently. The tweet suggested that the user would be able to withdraw their bitcoins, but would no longer be able to trade Bitcoins. In other tweets, the exchange stated that services would no longer be available in the user’s region for security reasons. On the platform, it is alleged that a message appeared on the Iran country page stating that LocalBitcoins is not available in the selected region.
LocalBitcoins and Iranian Relations
LocalBitcoins was once a trusted and frequented Iranian trading platform. Iranians have been unable to possess international credit cards for decades, which is nearly always required on popular bitcoin trading websites. However, LocalBitcoins allows users to pay with their local bank accounts. To Iranians, this understanding implies a familiarity with the largely independent Iranian banking system. Additionally, Iranians trusted LocalBitcoins for their secure transaction methods. The platform holds funds in an escrow account until both parties have confirmed, decreasing the potential for fraud.
LocalBitcoins has refused to comment on several requests for reasons on the Iranian ban. It has been suggested that mounting pressure from the US against Iran has influenced the exchange to block Iranian users.
US President Donald Trump unilaterally withdrew from Iran’s nuclear agreement and declared that new rounds of strict economic sanctions would be imposed. Several exchanges have stopped offering services to Iranian users, including Binance, Bittrex, and ShapeShift. Consequently, Iranians engaging in online crypto trading have experienced negative repercussions.
CEO of Iranian fintech Bahamta, Milad Jahandar, indicates that the elimination of Localbitcoins for Iranian bitcoin traders will lead to increased fraud in commerce relating to cryptocurrency. In further statements, Jahandar suggested that this move can backfire on the prevalence of bitcoins and crypto trading, as well as set back the bitcoin community. The CEO also believes that the exclusion of any users is contradictory to the decentralized concept of the bitcoin. Reportedly, Jahandar emphasized that bitcoin is a global network that disregards ethnicity and banning users is akin to the application of fiat currencies.
Where do Iranian Crypto Traders go from Here?
Iranians wishing to buy and sell cryptocurrency still have options. The bans from other exchanges are increasingly forcing Iranians towards anti-discriminatory exchanges that follow the decentralized theme of cryptocurrency. The Bisq exchange is an open-source peer-to-peer application that runs on Tor and has recently integrated Farsi to compensate Iranian users. Furthermore, all transactions are run privately or anonymously to avoid censorship and blocking based on prejudice.
Hodl Hodl is another exchange option for Iranian users and has similarities to LocalBitcoins. Hodl Hodl has also integrated the Farsi interface for Iranian users as a sort of means of welcoming them to their service.
Finally, KeepChange is another peer-to-peer exchange which vows to maintain prevention of government interference and censorship. Iranian cryptocurrency trading is not likely to end anytime soon.