On Wednesday, the Office of Foreign Assets Control (OFAC) of the US Treasury Department announced that two bitcoin addresses related to Iranian residents Ali Khorashadizadeh and Mohammad Ghorbaniyan were added to the sanctions list for specially designated countries, one first for the office.
Hours later, the Telegram channels in Iran have begun to light up the talk about the privacy and security of bitcoin wallets.
Iranian sources have informed CoinDesk that some of them are no longer able to access the ShapeShift swap swap platform, even when they use virtual private networks (VPNs). As such, sanctions seem to already have an impact on the Iranians who want to make legitimate use of cryptocurrencies.
That is why Javad Sedighi, cryptocurrency miner in Isfahan, Iran, described the news to CoinDesk as "alarming" because the stigma damages the bitcoins in the country.
Sedighi has been using bitcoin for two years, mining activities and sending remittances to the family abroad. Like many Iranians who rely on cryptocurrency to support their families, political news has made him worried about the security and privacy features of some bitcoin wallets.
Some of Iran's favorite portfolios are Electrom, Atomic, Exodus, Samourai Wallet and Wasabi Wallet, in particular the CoinJoin function that sends many batch transactions simultaneously to make it more difficult to monitor specific portfolios. According to several Iranian developers, the interest in private currency zcash is much more common these days.
An anonymous developer of Tehran, who traded ethereum for bitcoins in global trade, then sent the bitcoins to his wallet, agreed that security and privacy are the two main attributes he looks for in a portfolio.
"Cutting an entire country from global business is cruel," said the developer, also stating that laws should limit criminal activity. However, most trade in mainstream cryptocurrencies like Coinbase will reject transactions related to prohibited currencies, even if several phases are removed. As such, some criminal actions could have knock-on effects in the thriving community of buyers and retail users in Iran.
An anonymous source in Tehran with personal knowledge of the authorized portfolios told CoinDesk that they could sell some of their ransomware-related bitcoins to unsuspecting street merchants, which are increasingly popular in Iran, given their limited access to international trade.
That is why the cryptocurrency trader and developer Sin Saad in Tehran is now reflecting on how sanctions could have an impact on his livelihood. He told CoinDesk:
"How can I know that these bitcoins are sanctioned by constantly checking the website of the Treasury, the Federal Reserve or the ACAC?"
For less experienced bitcoin technology users who might struggle with monitoring specific blockchain data, these ads pose a significant risk. Meanwhile, Telegram was not the only platform to talk about sanctions on Wednesday.
Attorney Steve Middlebrook tweeted that anyone who has received bitcoins from those sanctioned addresses should "keep the coins and inform the feds". Stephen Palley, partner of the Washington law firm, D.C. Anderson Kill, tweeted his support for this legal perspective.
On the other hand, the lawyer Nelson Rosario, specializing in blockchain technology in Marshall, Gerstein & Borun LLP, tweeted an open question about how users can "clean" bitcoins from a sanctioned bitcoin wallet address. Could you cooperate with US authorities really helping innocent bystanders avoid blacklists?
Meanwhile, Iran's mining industry is booming with new non-contaminated bitcoin crops.
Thanks to Iran's subsidized electricity offers, which make cryptocurrency extraction relatively economical, mining continues to grow despite global price declines.
"I'm trying to expand the mining industry and [bitcoin’s] He uses the case for business in Iran, "said Sedji, the miner from Isfahan, adding that he wants to help build a world with less sanctions and censorship." Bitcoins in Iran are mostly young people who are interested in technology. "
Just like Sedighi, the developer of Tehran Saad said that political complications only increase their dedication to the promotion of traditional adoption. Saad said:
"We, as developers and traders, will find our path to transforming our dreams into reality."
He added that the promotion of sound networks of private bitcoin portfolios, beyond business exchanges, is important because governments can only impose sanctions against individuals and banks that interact or receive bitcoins indirectly from an identified portfolio.
Governments can not freeze privately held and managed bitcoin portfolios. So, the more people memorize and deal with bitcoins themselves, the less legitimate users have to fear discrimination.
"When the criptos become so common and accepted globally, these measures do not work," said Saad.
Therefore, choosing a bitcoin wallet with strong privacy features is important for those who, in some way, are literally becoming their banks.
The anonymous developer of Teheran told CoinDesk that despite the political tensions, the singular bitcoin value proposition inspires more local engineers to learn about the blockchain and start experimenting with the uses of technology.
"Public adoption would be the best thing we could wish for," he added.
Image of the Iranian currency through Shutterstock