LocalBitcoins Bans Bitcoin Buying in Iran in Blow to Rising Crypto Commerce

"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," reads a response by LocalBitcoins to an Iranian user that has circulated in social media and local news websites.

A message also appeared on the platform's Iran country page that read: "Unfortunately, LocalBitcoins is currently not available in your selected region." On Twitter, the exchange told several Iranian users: "Our services are not available in your region for risk-based reasons."

LocalBitcoins has been perhaps the most popular bitcoin trading website among Iranian users, as it doesn't require international credit card information - something Iranians have been bereft of for decades - and allows users to pay with their local bank accounts.

LocalBitcoins did not respond to several requests for comments by CoinDesk on the reasons behind its decision to ban Iranians.

The escalating "Maximum pressure" campaign of the U.S. against Iran has prompted the Finnish website to block Iranian users.

Legitimate Iranian crypto users have already felt the sting of sanctions several times during the past year as multiple exchanges, including Binance, Bittrex and ShapeShift have stopped offering services.

According to Milad Jahandar, CEO of Iranian fintech Bahamta, the elimination of Localbitcoins as one of the few remaining viable options for Iranian bitcoiners will lead to more fraud in cryptocurrency-related commerce.

Programmer Ziya Sadr says two alternatives to Localbitcoins have already proven to be better and are attracting Iranian users.

Lastly, some Iranian users have also turned to the KeepChange peer-to-peer exchange, which in the wake of the LocalBitcoins ban sought to reassure possible users that it remains loyal to the bitcoin philosophy of preventing government interference and resisting censorship.

"Iranian users, as well as any other nationalities anywhere in the world, can use KeepChange for buying and selling bitcoin without worrying of any kind of censorship, sanctions, money seizures, etc.," the exchange told an Iranian website on May 19.