The US government is still bullying Iran by confiscating well over 500 Bitcoin ($4.1 million) in the past year. While Bitcoin – and other cryptos for that matter – can’t simply be taken in the way fiat currencies can, there are workarounds governments and regulatory bodies can use. It seems in this case the US government had strong-armed several exchanges to give up the details of any Iranians using its services. It has subsequently forced the exchanges to freeze these accounts indefinitely. This is the latest revelation in a long-standing dislike between the two nations. The US argues that Iran supported the 9/11 terror attacks and has labelled the country as terrorist financiers. Just last month the US begged German banks not to give Iran $350 million of its own money.
A Sticky Situation
Unfortunately, the Iranian government banned banks and financial institutions from dealing with cryptocurrencies and it has blocked access to most crypto exchanges for its residents. For the individuals who had their money frozen in crypto exchanges, there will be a long and tricky path to recover the funds, as no lawyers in Iran will want to touch the case. While none abroad will either for fear of United States sanctions – after all, they will be labeled terrorist colluders. Iran has two options, give in to US demands or reverse the ban on crypto and fight the case tooth and nail. Reversing the crypto ban could open more doors in the future for Iran to be able to do business with the world and circumvent US sanctions.
Tough US Economic Sanctions
Iran isn’t the first country the US has imposed economic sanctions upon. Venezuela is another of these countries suffering at the hands of fiat currency sanctions. This has created a realm of hyperinflation that has reached 46,300% and is still climbing. Venezuela’s fiat currency is now virtually worthless and the locals are resorting to cryptocurrencies. The local government created their own oil-backed crypto and are building homes for the homeless using it.
The cost of electricity is so low, mining Bitcoin has become a lifeline for the Venezuelan people and this is creating an economy that is slowly turning to crypto for the solution to its problems. The worse the US sanctions make an economy, the more the people are turning to crypto for a solution and way out of poverty.
Always Use a Cold Wallet
To a certain degree, the Iranians with lost Bitcoin are partly to blame. All smart crypto traders and investors know that digital cash is simply not safe on an exchange, especially a centralized exchange that knows exactly who you are. It’s for this reason the Vitalik Buterin slammed centralized exchanges in a recent TechCrunch interview. One of the best practices of using an exchange is to keep money in the exchange wallet for as little time as possible. Simply make your trades and get the money out of there as soon as possible and store in a cold wallet. If you’re looking for a good cold wallet, we reviewed the best hardware wallets of 2018.
Political Turmoil Rages On
The more this argument goes on, and the more economic sanctions the US places on countries, the more it feels like the US wants countries to start adopting Bitcoin and cryptos. This is because all transactions are then publicly available and therefore easier to track, plus the United States National Security Agency designed the SHA-256 hashing protocol that keeps crypto secure. The important thing to take from this is that ensuring you know what you’re doing on a crypto exchange will keep your money safe.