In late 2017, Bittrex banned the accounts of its Iranian users. This unfortunate event took place due to the nature of the US foreign policy, in the wake of increased diplomatic tensions. The news articles rolled at the time in order to call out this unjust approach to restricting traders. But soon the smoke dissipated and everybody seemed to have forgotten about the case.
When hearing about Iranian citizens losing access to their coins, fans of financial sovereignty might point out to the "not your keys, not your coins" principle, and suggest that it was due to the recklessness of the centralized exchange users that this ever happened. However, as we have seen more recently, the US Treasury Department of Foreign Assets Control has also targeted individual Bitcoin holders from Iran by sanctioning two addresses. It's clear that the scope and scale of the operation are greater and target Iranian crypto-enthusiasts at multiple levels.
The purpose of this article is not to question the legitimacy of the international order, call out the United States for being too harsh or blame the regime from Tehran. These topics are very serious for the greater understanding of the cryptocurrency economy and deserve individual scrutiny, but are irrelevant in this particular situation.
When the US decided to pull the lever and financially sanction the Iranian government, cryptocurrency exchanges had to comply with the policies of their jurisdiction. Bittrex, a Seattle-based company, made no exception.
Yet the issue isn't compliance with law, but the opaque way in which it was arbitrarily enforced. According to personal testimonies collected throughout the investigation, Bittrex hasn't given their users a notice before shutting down the accounts, and millions of dollars worth of cryptocurrencies are now stuck in an uncertain state. Furthermore, the American exchange hasn't released any kind of official response or policy to tackle future actions in the event of better governmental relations: Iranian users are still uncertain whether or not they will ever get access to their funds if the political climate changes.
The lead and early phase of the investigation
On January 16th 2019, a Twitter user who goes by the name of Ziya posted a series of comments about Bittrex being unaccountable and unfair in relation to its Iranian customers. At first I thought that the story was new and worthy of a quick news article, but I soon found out that the same old problem that we heard about in 2017 has remained unresolved.
To some of the privileged citizens of the world, who live under peaceful regimes that respect private property and defend it under the rule of law while being in good relations with the United States of America, this may sound shocking and outrageous. But almost two years after the first round of banning, nothing has happened and thousands of users were left in a limbo.
However, at this point in time there are international sanctions against the Iranian government and its alleged money laundering activity that also finances terrorism. The situation is clearly delicate and there is no reason to question the legitimacy of the concerns or the rather unilateral approach to diplomatic relations by the United States of America (which also hold the presidency of the Financial Action Task Force). And in the case of cryptocurrencies, as financial assets aren't controlled by any central bank and whose circulation cannot be censored, it made sense to shut down the centralized trading hubs.
Now let's get back to the case of Bittrex users: by virtue of Ziya's willingness to spread the word about his cause, I was added to the Telegram group "Bittrex Disabled Accounts" (which, at press time, has 569 members who still post on a daily basis). The Iranian crypto enthusiasts have been rather nice, they sent to me appeals that they have made to Bittrex as a mean to inquire about the reasons behind their ban, and they even told me stories about the events that followed a Donald Trump speech.
The essential question at stake is: how much of the decision to ban users without notice and time to withdraw funds was made by the US foreign policy, and to which extent has Bittrex contributed to this extreme measure? Of all the cryptocurrency exchanges, it seems like it's Bittrex that gets most criticism from Iranian users.
Originally posted on Crypto Insider : https://cryptoinsider.com/?p=37247