Helsinki-based Bitcoin exchange, Localbitcoins has now banned traders from Iran from using the digital currency exchange.
Localbitcoins is a peer to peer (P2P) Bitcoin exchange that basically connects buyers and sellers together while it acts as a neutral third party managing customer service, wallet system, escrow and conflict resolutions.
According to Bitcoin traders from Iran, the ban was a sudden occurrence that was unexpectedly imposed by the exchange on all access of the platform from Iranian geography.
By this ban, it means any individual from Iran will only be able to withdraw their Bitcoins and other digital currencies in their wallets
While Localbitcoins has not stated reasons for it’s decision, there are indications that it’s not unconnected with the recent escalation in already belligerent relationship between the United States and Iran. Last year, President Trump announced that it was pulling out of the Iran Nuclear deal because it claimed Iran was still violating the specifics of the deal and it’s supports for foreign extremist groups. While Iran has denied all the allegations, the reality of the US sanctions on the country has taken a toll on its economy as well as the day to day business activities in amongst its citizens.
As a result of the US sanctions on Iran, many Iranian citizens have found it extremely difficult and mostly impossible to buy and sell goods with most countries in good relationship with the US. However, Bitcoin and other digital currencies have been used to bypass this imbroglio.
In the last few months, trading in Bitcoin and digital currencies have seen high frequency and trade volumes in an unprecedented rate. It is very glaring Localbitcoins decided to ban Iranians because of its operations in the US and its avoidance of suffering a US sanctions for aiding and doing business in Iran.
The feat of US sanctions on companies transacting business with and outside of with Iranian-linked entities has been a major issue. China’s Huawei was sanctioned and banned by the US for doing business with Iranian entities despite a US sanction on Iran.
It is not clear if other exchanges would follow suit but what is glaring is that geopolitics has is now a factor in the digital currency community, an irony given the nondiscriminatory philosophy of a digital currency such as Bitcoin.