Traders from Iran have been banned from using the peer-to-peer trading platform Localbitcoins.com within the country. The Iranian section of the website displays a short message that states that the exchange is “currently not available.” The news follows significant Iranian rial trade volume on the Localbitcoins platform, which has been climbing steadily over the last few weeks.
Iranians Can No Longer Trade Within the Country Using Localbitcoins
The Helsinki-based BTC exchange Localbitcoins.com has stopped servicing Iranian residents but hasn’t disclosed why it made the decision. Over the last few weeks, however, tensions have been rising in the Middle East between Iran and the U.S. For instance, last week the U.S. military put regional soldiers on high alert and the State Department asked nonemergency federal employees to leave the country. The move from Localbitcoin.com is likely due to harsh economic sanctions leveled against Iran. The U.S. imposed sanctions against Iran in 1979 and since then members of the United Nations have also participated in trade bans. Over the last few years, reports have detailed that Iranian residents have been using cryptocurrencies to escape these sanctions so they can buy products and services overseas.
BTC trade volumes stemming from the data aggregation website Coin Dance show that there’s been significant trading taking place in Iran up until Localbitcoins decided to geo-restrict the nation. The week of May 18 showed some of the highest levels of Iranian rial Localbitcoins volumes since the crypto bull run in 2017. Localbitcoins rial-measured trade volumes were steadily climbing for weeks leading up until the decision to stop service in the oil-rich nation. According to a screenshot of the Localbitcoins support team talking to an Iranian user, residents from the region have been told they can withdraw their BTC, but they cannot trade on the platform. When an individual visits the Iranian Localbitcoins URL there is a notice which states:
Unfortunately, Localbitcoins is currently not available in your selected region — Please look for other location or come back later.
Bypassing Strict Economic Sanctions
Cryptocurrencies have become a popular medium of exchange in Iran, but regulatory uncertainty also stems from Iranian government officials and the country’s central bank. A few days ago on Bitcoin Pizza Day, a group of Iranians got together in Tehran to celebrate. The owner of the restaurant where the meetup took place, Reza Abdollahi, told the press: “We have up to 200 people paying with crypto each month, mostly consisting of large groups who throw parties at the restaurant to use the discount.” Abdollahi also said that a great majority of those payments derive from people using ethereum (ETH) as well. The Tehran-based Blockchain Academy educator, Tina Kheiri, added to the commentary by stating:
Scores of people are mining cryptocurrencies and some businesspeople are using parts of their factories as mining farms, which I think is great under sanctions.
Iranians flocking to cryptos really started heating up after U.S. president Trump told the world he would withdraw the U.S. from the Iran nuclear deal and reimpose far stricter economic sanctions. Additionally, miners stemming from China and other regions throughout the world have been moving operations to Iran for cheap electricity. Reports have noted that Chinese miners have found $0.006 per kilowatt-hour. Last December, Iranian college students used bitcoin to bypass economic sanctions to purchase school supplies and books. The Localbitcoins ban will be a deep blow to traders within the country seeking to acquire digital currency in a peer-to-peer fashion.
What do you think about Localbitcoins ceasing to service residents of Iran? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, Localbitcoins, and Coin Dance.
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