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US sanctions against Iran have had a paralyzing effect on the country. Now, Iranian bitcoin users feel the effects of such sanctions after the US government has announced actions against two bitcoin addresses used in ransomware attacks.
Last Wednesday, the US Treasury Department's Office of Foreign Assets Control (OFAC) announced that two bitcoin addresses have been added to the list of the Specially Designated Nationals sanctions of the office.
The two bitcoin addresses are linked to Iranian citizens Ali Khorashadizadeh and Mohammad Ghorbaniyan. The two were accused of having processed 6,000 BTCs collected in a ransomware scheme in recent years.
These actions mark the first time OFAC has taken action against bitcoin addresses and bitcoin users.
Unfortunately for other Iranian bitcoin users, however, sanctions have had a negative effect on legitimate crypto operations across the country.
The Iranian Bitcoin legal users are worried about their cryptic fortunes being targeted
Immediately after the news was announced, the Telegram channels across Iran lit up with complaints about breaches of privacy and the security of bitcoin wallets, as reported by Coindesk.
Coindesk claims that its Iranian sources were no longer able to access the popular ShapeShift swap swap platform after the sanctions were announced, even when using virtual private networks (VPNs).
In other words, US sanctions are already affecting bitcoins in Iran, even users who oppose the law.
CoinDesk also interviewed a cryptocurrency miner based in Iran who called the news "alarming". That miner negatively supports the stigma against Iranian bitcoins affects all bitcoin users in the country. In the last two years, that miner has begun to extract bitcoins to support the family abroad. The miner is based on profits related to cryptocurrency to support his family at home and abroad. The latest political news worries him for the future.
Now, the Iranians are worried about keeping access to their bitcoin wallets. It is not clear how far the US sanctions will come. Would the Iranian portfolios be affected? It is certainly possible when the wallets are online or, worse, held in an exchange.
Today, Iran's most popular portfolios include Electrom, Atomic, Exodus, Samourai Wallet and Wasabi Wallet.
Wasabi Wallet is particularly appreciated for its CoinJoin obfuscation function. CoinJoin sends multiple transactions in batches, mixes them together, and then sends the transactions to the intended recipients. This makes it impossible to trace funds on the blockchain from the sender to the recipient, giving Iranian bitcoin users more privacy.
"Taking away an entire country from global trade is cruel"An Iran-based developer, interviewed by CoinDesk at the beginning of this week, said the developer acknowledged that laws should limit criminal activities, but law-abiding bitcoin users should not be influenced in this way.
Did you receive coins from a sanctioned address?
Part of the concern of Iranian bitcoin users is that they may have received funds from a sanctioned address. The US government has sanctioned the two bitcoin addresses used by the ransomware scammers mentioned above. However, there may be further actions against the beneficiaries of funds from these portfolios.
For example, if the scammers sent their bad bitcoins to an exchange and you bought bitcoins on the same day, your bitcoins could be "contaminated" because they were previously used in illegal activities.
That's why Iranian bitcoins are worried.
A lawyer recommended that Iranian bitcoin users who received bitcoins from the sanctioned addresses alerting US authorities. It is unlikely that Iranian bitcoin users will trust the US government with any information.
Iran has implemented crypto-friendly regulations
Iran has a lot of cryptocurrency users. This is why these sanctions could have enormous effects on a significant part of the cryptic community.
The country of Iran offers subsidized electricity to its population. This makes the cryptocurrency extraction surprisingly convenient in the country – cheaper than it would be elsewhere in the world.
Mining continues to expand throughout the country even when bitcoin prices fall. While cryptic miners around the world are struggling to scrape away, the encryption miners in Iran continue to make it work.
The sanctioned Bitcoin addresses processed over 6,000 BTC in Schema Ransomware
There's a good reason why the United States has approved two bitcoin addresses. The two addresses associated with Ali Khorashadizadeh and Mohammad Ghorbaniyan would have been used as part of a ransomware scheme.
Here is how the Undersecretary of the Treasury for Terrorism and Financial Intelligence Sigal Mandelker described it in a statement:
"We are publishing digital currency addresses to identify illicit actors operating in the digital currency space: the Treasury will aggressively pursue Iran and other rogue regimes trying to exploit digital currencies and weaknesses in cyber and AML / CFT safeguards to promote their nefarious objectives ".
The two Iranian citizens would have facilitated the financial transactions related to the SamSam ransomware. That ransomware has targeted more than 200 people and organizations all over the world in recent years. Victims include hospitals, universities, government agencies and corporations.
The scheme worked similarly to other ransomware attacks: the ransomware would attack a computer or server, silently encrypting the data and locking it behind a password. Users will be required to pay a fee (in bitcoin) to unlock files. Otherwise, the files would be deleted.
The Iranian couple would have processed 6,000 BTCs ($ 25 million dollars) in illicit profits in collaboration with the ransomware creators. The two have used over 40 different cryptocurrency bags, including several US-based bursaries, to sell the funds and exchange them with the Iranian Rial.
"As Iran becomes increasingly isolated and desperate for access to US dollars, it is vital that virtual currency exchanges, peer-to-peer exchangers and other digital money service providers harden their networks against these illegal schemes, "said Mandelker.
While most agree that ransomware systems are negative, it seems unfair that an entire country is targeted due to the actions of two bitcoin users.
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