P2P Bitcoin Trading Platform LocalBitcoins Leaves Iranian Crypto Traders Dry

[Magician]

LocalBitcoins.com, the world’s most-popular peer-to-peer bitcoin trading platform, has begun restricting its service for Iranian users this week. As of now, creating new ads for buying or selling or updating old ads are restricted to Iranian traders. In the near future, there might be a possibility of locking users’ accounts and their bitcoins on the platform’s wallet.

LOCALBITCOINS WAS THE LAST INCLUSIVE CRYPTO TRADING STOP

Big centralized exchange services like Coinbase, Binance, and many others have previously restricted Iranian users, either with the seizure of their cryptocurrencies or by preventing account setup in the identification phase. As a result, many people used the LocalBitcoins, a bulletin board for localized trading, for exchanging cryptocurrencies.

LocalBitcoins.com does not require any credit card or online payment, making it easier for unbanked Iranian users. But as of Monday, the platform’s policy has changed, shunning Iranian users altogether.

LocalBitcoins confirms it is no longer offering services to Iranian citizens.

These restrictions are likely in compliance with financial laws in Finland where LocalBitcoins.com is located. Trump-led U.S. sanctions have led to exchanges, money remittance platforms and other financial institutions restricting their services to Iranians.

CONSEQUENCES OF THESE RESTRICTIONS

Crypto exchanges are the common go-to platforms for mainstream retail cryptocurrency trading. They offer a basic escrow service, where the seller’s cryptocurrency is locked by the exchange and after a successful trade, it’s released to the buyer.

These restrictions increase the risk of inherently insecure transactions with the lack of an escrow service.

Big exchanges want a bigger market and are following governments’ regulations to ultimately block Iranian users. The prohibitive approach is fundamentally contrary to bitcoin’s very decentralized, inclusive philosophy.

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