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One of the most commonly used peer-to-peer trading platforms in the world, LocalBitcoins.com, has officially withdrawn support for Iranian locals this week. Starting immediately, the Finland based platform no longer allows Iranians to trade on its platform.

This means that Iranians cannot create ads to sell or buy their assets and they also are no longer able to modify old ads already created in the past.

Furthermore, there’s a chance that sometime soon, accounts belonging to locals in restricted areas might even be locked on the platform. However, at the moment, even though locals cannot trade, LocalBitcoins.com currently allows account holders to withdraw their Bitcoins.

Why The Restrictions?

LocalBitcoins.com is yet to officially disclose their reason(s) for withdrawing support for Iranian customers. However, there are speculations that the restriction was enforced due to certain financial laws and regulations in its Finnish base.

In the past, U.S. sanctions have caused exchanges and many other financial institutions to withdraw support from Iranians and there’s a chance this is somehow an extension of such sanctions.

Before now, some of the other major exchange firms including Binance and Coinbase, have already withdrawn support from Iranian customers. In some cases, the cryptocurrencies being held by these locals have been confiscated. In other cases, locals are just not allowed to setup accounts. When this happened, Iranians shifted to LocalBitcoins.

LocalBitcoins does not mandate its users to make online payments or even use credit cards and it fast became the favourite choice for Iranians, however, this has now changed. In an official correspondence where the platform was asked if there are restrictions for residents of the Islamic Republic of Iran, LocalBitcoins responded saying:

“Unfortunately, our service is no longer available in your country.

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.

We apologize for the inconvenience!”

Effect of Specific Restrictions by These Platforms

Currently, the best way for people all over the world to buy and sell cryptocurrency is through the many different exchange platforms available.

These exchange services operate in such a way that a seller’s funds are safely locked away by the exchange and kept that way until the transaction or trade is successfully completed and the funds are then released to the buying party. The restrictions these companies are setting in motion seriously hamper the security of this “escrow” option.

On the other hand however, these exchange and trading platforms might not have much of a choice. Even though the restrictions go against the essential nature of cryptocurrencies which are open to everyone and are decentralised, these exchanges to need to pull in more customers on their platform. Ignoring certain restrictions could eventually prove detrimental to them.

This certainly now begs the question of how untouchable the cryptocurrency market really is, if government sanctions can seriously impede its operations. Crypto is supposed to be fully decentralised and immune to governmental regulations and sanctions. If regulations can affect adoption, maybe there needs to be some sort of solution to circumvent that.

The views and opinions expressed in the article Direct Peer-To-Peer Bitcoin Trading Platform, LocalBitcoins, Discontinues Support for Iranian Users do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.

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