LocalBitcoins, the popular Bitcoin exchange site, has cut off services to Iranian customers amid suggestions that U.S. sanctions against the country are taking their toll. Iranian customers heading to the site to buy or sell their Bitcoin are now met with the message “Unfortunately LocalBitcoins is currently not available in your selected region. Please look for other location or come back later.” The move follows a decision two months ago to legalize Bitcoin in Iran as a currency after previously issuing a ban as authorities look for a way to open the country up to tourism in the wake of harsh U.S. sanctions.
Iran’s Most Trusted Exchange
LocalBitcoins’ ban comes after a week of spikes in volume on the exchange between BTC and the Iranian rial, suggesting a huge buying of the digital currency by Iranian nationals (data courtesy of Coindance):
LocalBitcoins has been popular with Iranian users because it doesn’t require international credit card information, which is something that Iranians have been without for decades, and because it allows users to pay with their local bank accounts. The website was also apparently open to reviewing users’ banking documentation to resolve potential problems, suggesting that LocalBitcoins had advisors familiar with the largely Iranian banking system, which is notable for its isolation. In addition to these features, LocalBitcoins was also trusted by Iran-based users because it held funds in escrow until both sides had fully confirmed the deal, thereby ensuring that the transaction was conducted safely and with a reduced risk of fraud. LocalBitcoins has only offered one official response to queries by customers, where it confirmed the lack of service in the region:
Where Next for Iran’s Bitcoin Fans?
Iranian crypto fans are not without other options however. Decentralized exchanges (DEXs) are attaining a larger share of total volume thanks to their increasing speed, functionality, and coin choice, with the chief advantage being that they don’t discriminate geographically (although some partially decentralized exchanges have been forced to ban New York-based customers). We’re yet to see a truly decentralized exchange dominate the market in the way that Binance has done with the centralized exchange market, but with the amount of DEXs coming out and the quality improving it shouldn’t be too long before Iranian users have an alternative way to buy and sell their tokens.