Peer-to-Peer Bitcoin Exchange LocalBitcoins Halts Services in Iran

LocalBitcoins, a Helsinki-based peer-to-peer cryptocurrency exchanges, has recently stopped offering its services in Iran, presumably over U.S.-led sanctions that pressured other exchanges into withdrawing their services from the country.

According to CoinDesk, various LocalBitcoins users started noticing they were having problems posting new trades and updating previous ones, before the firm’s website started showing a message in Iran’s country page stating “LocalBitcoins is currently not available in your selected region.”

A response from the peer-to-peer exchange given to an Iranian user soon started circulating on social media. It saw LocalBitcoins state:

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.

Later on, the exchange replied to several Iranian users on Twitter, stating that its services weren’t available in the country for “risk-based reasons.” The move came as a surprise, as available data shows LocalBitcoins was seeing its trading volume in Iran surge.

According to some the exchange allowed users to trade using their local bank accounts, without the need for an international credit card. As covered, sanctions have seen Iran be get banned from using the SWIFT system.

In response the country ended up launching a gold-backed cryptocurrency called “PayMon” that is based on the Stellar Lumens (XLM) network. The cryptocurrency seemingly hasn’t been mentioned since reports revealed a company called Ghoghnoos and four national banks were cooperating with authorities to produce a system for it.

Currently, Iranian users can withdraw their bitcoins from the website, but are unable to create any new trades. The move sees LocalBitcoins join a number of cryptocurrency exchanges that have withdrawn their services from the country, including Binance, Bittrex, and ShapeShift.

Nevertheless, alternatives exist. These include decentralized exchanges that allow users to trade cryptocurrencies directly from their wallets. While U.S.-led sanctions can pressure exchanges into blocking Iranian users, truly decentralized platforms won’t discriminate based on nationality.

It’s worth noting that earlier this year LocalBitcoins revealed it was working with local regulatory authorities to implement new anti-money laundering (AML) regulations to comply with local standards. In January, the exchange was breached as a hacker managed to steal $28,000 worth of crypto phishing its users.