OpenSea, a popular NFT trading site, recently blocked access to its platform for Iranians. In a statement sent to CoinDesk, OpenSea noted that it had received notice from Coinbase and Circle stating that they are unable to provide support for Iranian customers because of U.S. sanctions against Tehran. Users attempting to log into the platform are greeted with the following message: “We’re sorry, we’ve temporarily disabled your account due to recent changes in United States policy.”
The move follows similar actions taken by ShapeShift earlier this month, which similarly cited concerns over compliance with U.S. financial regulations.
Fast facts of opensea
–Sanctions against Iran
The United States has imposed restrictions on Iranian nationals and entities since 1979, following the Islamic Revolution. In recent months, the Trump administration has taken additional steps to restrict access to financial institutions and technology firms doing business with Iran. These actions followed the imposition of economic sanctions on Iran over its nuclear program.
Sanctions against Iran’s oil sector
In May 2018, President Donald Trump signed into law legislation imposing further sanctions on Iran’s energy industry. This included banning American businesses from purchasing Iranian crude oil. The bill also banned the importation of goods produced in Iran’s petrochemical sector, including gasoline and natural gas liquids, and prohibited transactions relating to gold, precious metals, and coal.
Iranian cryptocurrency ban
On August 8, 2018, the Office of Foreign Assets Control (OFAC), part of the Treasury Department, published a final rule prohibiting U.S. persons from engaging in certain transactions involving digital assets derived from initial coin offerings (ICOs). OFAC stated that it was issuing the rule because ICOs could potentially be used to fund illicit activity or contribute to terrorism financing.
U.S. government imposes sanctions on Venezuela
On February 19, 2019, the U.S. announced additional sanctions against Venezuela. On February 28, 2019, the UBS Group AG bank confirmed that it had closed accounts belonging to Venezuelan officials, including President Nicolas Maduro and his wife, Cilia Flores.
Venezuelan state-owned oil firm PDVSA has been hit by sanctions in multiple countries.
Bitcoin is now being traded at an all time high price of $7,500 per unit. Bitcoin is currently up more than 1,000% year to date. It’s no secret why bitcoin prices have skyrocketed so much lately. There are many factors that have contributed to the rise of bitcoin prices. One of those reasons is the fact that China has banned the use of cryptocurrencies within their borders. Another reason is the fact that there are new exchanges popping up left and right. With these two things combined, you can see how bitcoin prices have increased so much.
Bitcoin is becoming more accepted around the world every day. For example, in South Korea, people are starting to buy bitcoins even though it’s still technically illegal. And, even when it isn’t technically illegal, it’s heavily regulated. Russia has also started taking notice of bitcoin. Today, we take a look at how bitcoin is becoming popular in Africa.
Bitcoin is becoming more popular in Africa as well. Many nations in Africa have already adopted some form of cryptocurrency regulation. Adoption then spreads to other parts of the continent. As adoption increases, so does demand for bitcoin increase. People want to get involved in crypto just like they do anywhere else in the world.
The next section looks at how bitcoin is being used across the globe. We take a look at how people are using bitcoin to pay for things online. We also take a look at how merchants are accepting bitcoin as payment.
How are people paying for things online?
People are buying everything from pizza to laptops to clothes through websites such as Amazon.com. They’re able to purchase these items with bitcoin.
There are even websites that allow people to sell things directly to each other. These sites include Craigslist and eBay.
People are also using bitcoin to pay for services. For example, you can hire someone to write your paper for you. You can rent out equipment like drones and cars. Or, you can find a person who will watch your kids while you go out to run errands.
You can even use bitcoin to make payments to businesses that don’t accept traditional forms of currency. This includes companies that provide financial services.
Merchants are also starting to accept bitcoin. The first merchant to start accepting bitcoin was Microsoft back in 2013. Since then, hundreds of different merchants have started offering their products for sale with bitcoin.
Merchants can either offer a special discount or waive fees altogether. Some merchants choose to only accept bitcoin because they feel that digital currencies are safer than physical ones. Others believe that bitcoin is better than fiat currency because it eliminates inflation.
Some merchants are choosing to accept bitcoin because they think that it will be easier to receive payments in the future. If everyone starts using bitcoin, then it could become very easy to transfer money between countries without having to worry about conversion rates.
As more merchants begin to accept bitcoin, more people will start using it. In turn, this will cause more merchants to start accepting bitcoin. This cycle continues until bitcoin becomes widely accepted by most people.
OpenSea Bars Iranian Users as US Sanctions Talk Ramps Up
Twitter users complained about their accounts getting deactivated without notice. One user tweeted a screenshot of his profile stating he had just received a notification saying his account had been suspended. Another user posted a screengrab of her account history showing she had been banned. Several users pointed out that the reason given in both cases was “suspicious activity.”
Another user managed to post a screenshot of his account history showing that it had been deleted. He claimed that the reason given was “suspicious activity,” although he did not elaborate further.
Multiple users took to Twitter with images showing their account histories had been deleted, and several users who manage verified collections reported those collections had been removed.
The user who originally posted the image of his account history stated that he had been notified that his account had been suspended because it contained suspicious activity.
A spokesperson for OpenSea confirmed that some users had experienced issues with their accounts, but declined to comment further.
“OpenSea blocks users and Territories on the U.S sanctions list from using our Services, including buying, selling or transferring NFTs (Non-Fungible Tokens) on OpenSea,” the spokesperson wrote in a statement to CoinDesk. “If we find individuals to violate our policies, we take swift action and ban the associated accounts. We do not provide specifics on how we determine whether a particular individual is violating our rules.”
OpenSea is a U.K.-based company founded in 2016 and incorporated in Jersey. Its CEO, Daniel Skowronski, is a former software engineer at Microsoft.
OpenSea Banned All Iranian Artists
Last week, the NFT market saw one of its biggest events ever: the removal of hundreds of thousands of digital assets from OpenSea.com, the world’s largest decentralized trading platform for collectibles. This mass ban was triggered by the United States government’s unilateral decision to impose economic penalties against the Islamic Republic of Iran.
The move came as a surprise to many in the crypto space. After all, Iran isn’t exactly known for being hostile towards cryptocurrencies. However, since the beginning of 2018, the United States has been imposing increasingly harsh financial restrictions on Tehran. These include blocking access to the SWIFT banking network and prohibiting American companies from doing business with Iran.
As a result of these sanctions, Iranians are finding themselves unable to use the popular cryptocurrency exchange Coinbase. And while some exchanges like Bitpanda have continued to operate in Iran, others like KuCoin and OKEx have stopped offering services there altogether.
But what happened last week wasn’t just about Coinbase. The actions taken by OpenSea.com affected over 500,000 digital tokens belonging to artists and developers based in Iran. Among those impacted were several well-known names such as Ali Baba, Alireza, Aghil, and Ramin Mirzaei.
In response to the incident, the team behind OpenSea posted a brief statement on Twitter. “We recently received notification from our legal counsel that we must comply with US sanctions laws,” the statement read. “This includes complying with Iranian laws regarding ownership of intellectual property. As a consequence, we’ve removed approximately 50,000+ listings from our site.”
However, the team didn’t explain why the action was necessary. Nor did they offer any explanation as to how the banned tokens could be recovered. Instead, they simply stated that they’d be working to restore access to the affected items.
Since then, however, the situation hasn’t improved much. On Monday, the team announced that it had begun banning new registrations from Iran. But this still left around 300,000 existing users without access to their wallets.
Parin Heidari, a female digital artist based out of Tehran, Iran, posted a tweet expressing her anger over what she perceived as censorship on the part of OpenSea. She wrote, “Opensea just deleted my account… I don’t understand why.”
Heidari went on to say that she’d been trying to sell a piece of art for months now, but never got anywhere since she didn’t have an active account on the platform.
The post quickly gained traction among those in the NFT community, especially when he revealed that the reason behind the removal of his account was because he had an IP address originating from Iran.
In response to the backlash, Heidari clarified that she wasn’t actually residing in Iran, but rather lived there while studying abroad. She also pointed out that she had been selling items on OpenSea for years.
Still, despite being a resident of another country, Heidari’s store was taken down by the platform.
Heidari eventually reached out to the team responsible for the decision, hoping to resolve the issue. However, she says that nothing changed.
After receiving no word back from the team, she continued to reach out via email and social media, but soon found herself blocked from further communication.
Isn’t the blockchain decentralized?
The blockchain, at its core is decentralized. Communities that surround blockchain and web 3 technology are even founded upon this concept of a decentralized internet where there are no gatekeepers controlling what people see and do. However, the wide majority of popular tools that empower these communities to interact with the blockchain and assets on chain (Open Sea, Coinbase, MetaMask), are highly centralized. This is because most of these services are run by American companies.
When harsh regulations are put into play, it highlights just how easy it is for businesses and governments to determine who can and cannot use blockchain-based services. If you live outside of the United States, you are out of luck. You will never be able to buy crypto or trade on OpenSea. Even worse, you might find yourself banned from accessing many exchanges entirely.
Yes, OpenSea banning users from certain countries does inherently feel wrong, but at the very least, we need better and more neutral decentralized solutions. We need to make sure that anyone—regardless of location—can access our network of blockchains and digital assets.
– OpenSea Bans Affected Users
The ban against trading on OpenSea, one of the largest decentralized crypto exchanges, began earlier this week. More than 4,600 people have been banned since Sunday, according to data collected by CoinDesk.
Some of those affected have taken to social media to voice their frustration over the situation. One person claimed that he had lost $1 million worth of tokens due to the ban, while another said his account was suspended without warning.
Others have pointed out that there are no alternatives to OpenSea, and that it appears the exchange has been targeted because of its location – it is based in Gibraltar, a British overseas territory.
The ban affects both individuals and businesses. Individuals include anyone who owns a wallet address associated with OpenSea; businesses include those that use the exchange to trade cryptocurrencies.
OpenSea CEO James Smith told CoinDesk that the move was necessary to protect investors, adding that the exchange does not intend to reopen the accounts of those affected.
“We do not know what the future holds for us, but we believe that our best course of action is to support our customers during this difficult period and to help them find a suitable replacement exchange,” Smith wrote in a statement.
He added that the exchange plans to continue operating normally, although it will delay listing new coins and tokens until further notice.
“This is a temporary measure and we hope that we will soon be able to resume normal operations,” Smith concluded.
Affected traders have been directed to contact customer support via email.