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EghtesadOnline: The US federal government confiscated at least 500 Bitcoins belonging to Iranians, the president of Iran’s Blockchain Association said.

Sepehr Mohammadi added that Iranians had spent about 250 billion rials ($5.77 million) on the confiscated Bitcoins, IBENA reported.

The reason behind the move is unclear, but is purported to be the alleged circumvention of US sanctions against the country through the virtual currency.

That’s $3.15 million, in view of the current price of each Bitcoin at $6,300 at the time of writing. But the world’s largest crpytocurrency has been on a downward price trajectory for some time now, Financial Tribune reported.

“Last year, a considerable amount of Bitcoin assets belonging to a number of Iranians were confiscated by the US federal government for unclear reasons and this confiscation process is continuing,” Mohammadi said.

He noted that some believe the confiscation is because the Bitcoins were allegedly being used to circumvent US sanctions against Iran.

According to the official, the Blockchain Association has been following up measures to end the confiscation of Bitcoins and take them back.

It has “negotiated with several experienced attorneys in the capital market and [experts on] anti-money laundering regulations, including FATF, but no attorney has so far accepted the case”.

On the other hand, he pointed out that Iran’s Cyber Police, referred to as FATA, has refused to enter the case in light of the recent ban on the use of cryptocurrencies.

On April 21, the Central Bank of Iran officially prohibited all financial institutions, including banks and credit institutions, from handling cryptocurrencies and said the decision is rooted in their shadier side as Iran strives to better adhere to global standards on transparency in financial institutions.

“Since a variety of virtual currencies have the capability of becoming instruments for money laundering and financing terrorism, as well as means of transferring the money of criminals, the supervisory entity of the central bank has notified the ban on employing virtual currencies to banks to prevent the occurrence of any crime,” CBI said in a statement.

However, as was confirmed by a number of high-ranking officials, including Minister of Information and Communications Technology Mohammad Javad Azari-Jahromi, the ban was spurred by Iran’s ongoing currency issues that had peaked shortly before.

The Iranian government on April 10 abruptly unified the country’s dual foreign exchange rate regime and said it will answer all currency needs at the unified rate of 42,000 rials, which claim has been disproven as the country was forced last week to adopt a secondary foreign exchange market at open market rates. 

The cryptocurrency ban was criticized by many as a misguided attempt at preventing further capital flight amid a currency crisis. 

As expected, the ban also failed to put a dent in Iranians’ trading in cryptocurrencies. Authorized online exchanges that engaged in the purchase and sale of the currencies stopped operating for about two weeks in May, but have since resumed their work.

Circumventing US sanctions through cryptocurrencies has always been a talking point in case of Iran, especially since the country is currently developing its own national virtual currency. A number of Iranian officials have actually advocated the use of cryptocurrencies to maintain and boost trade with key partners.  

 

Iran Bitcoins US federal government confiscation