LocalBitcoins Bans Bitcoin Buying in Iran in Blow to Rising Crypto Commerce
LocalBitcoins has officially shut off service for Iran-based users, a move that follows weeks of rising rial trading volumes on the platform.
The Helsinki-based peer-to-peer
exchange has not explicitly said why Iranians are suddenly being cut off from its service, though U.S. sanctions are almost certainly the cause.
News of the move first circulated across local language Telegram channels earlier this week that the exchange had blocked Iranians. Users reported encountering problems in posting new trades and updating previous ones on the website.
“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,” reads a response by LocalBitcoins to an Iranian user that has circulated in social media and local news websites.
A message also appeared on the platform’s Iran country page that read: “Unfortunately, LocalBitcoins is currently not available in your selected region.” On Twitter, the exchange told several Iranian users: “Our services are not available in your region for risk-based reasons.”
LocalBitcoins has been perhaps the most popular bitcoin trading website among Iranian users, as it doesn’t require international credit card information – something Iranians have been bereft of for decades – and allows users to pay with their local bank accounts.
According to Iranian users, the website was also open to reviewing local bank account documents to resolve potential problems, signaling that they have advisors familiar with the largely isolated Iranian banking system.
Moreover, LocalBitcoins was trusted by Iran-based bitcoin users because it holds funds in escrow until both sides have given final confirmation, thereby ensuring transaction safety and lowering fraud.
“Since I traded in relatively high volumes, LocalBitcoins was my best option because I could find good offers with real people,” bitcoin trader Soroush Hakimi told CoinDesk.
“In local exchanges, rates are unfavorable in many instances while total volume of assets is low. For instance, you can barely find two bitcoins for sale in any given day.”