The world’s largest NFT marketplace, OpenSea, has reportedly begun barring its Iranian users from its platform, sparking outrage from NFT collectors and raising fresh debate about decentralization in the crypto space. It is also developing into a larger discussion about international sanctions and popular Web 3 platforms.
On Thursday, many Iranian OpenSea users started posting on Twitter that their accounts were being deactivated or deleted with no prior warning. Popular Iranian NFT artist who goes by the name ‘Bornosor’ expressed his frustrations on Twitter.
He stated, “NOT A gm AT ALL Woke up to my @opensea trading account being deactivated/deleted without notice or any explanation, hearing lots of similar reports from other Iranian artists & collectors. What the hell is going on? Is OS straight up purging its users based on their country now?”
Read: Why Russia can’t evade sanctions with crypto
What you should know
- Multiple users took to Twitter to share screenshots showing their account history had been deleted, and users who manage verified collections have reported those collections have been removed.
- A representative of the marketplace told CoinDesk in a statement, “OpenSea blocks users and territories on the U.S. sanctions list from using our services, including buying, selling, or transferring NFTs on OpenSea. If we find individuals to be in violation of our sanctions policy, we take swift action to ban the associated accounts.”
- The Iranian government is on the U.S. sanction list and the sanction expressly states that American companies are not allowed to provide goods or services to any user based in countries on the sanctions list. This list includes Iran, North Korea, Syria, and now Russia.
- OpenSea is a U.S. based company with its headquarters in New York and incorporated in Delaware. This means that the sanction does also affect the fact that it registered its business in the United States and must follow all laws pertaining to operating a business in the country.
- This comes as policymakers have taken a renewed interest in crypto companies’ compliance with sanctions amid the Russia-Ukraine war. U.S. Senator Elizabeth Warren also known to be an avid crypto critic, asked Federal Reserve Chairman, Jerome Powell about this during a Senate committee hearing on Thursday, asking whether crypto could be used to undermine sanctions.
- She stated, “Chair Powell, obviously you do not administer sanctions, but you are an expert on the international financial system. Are other countries currently using cryptocurrencies to evade sanctions? I’m thinking here of North Korea, Iran, Venezuela.” Powell responded stating that he has “read that those things happen.”
Read: EU to weaken Russia’s economic base by freezing all its accounts, others
These actions from OpenSea have sparked fresh debate about whether large blockchain-based firms and services are adequately decentralized, with MetaMask joining in on enforcing sanction-based crackdowns.
According to MetaMask’s Twitter account, Venezualan users were accidentally banned from accessing their MetaMask wallets, after blockchain development company Infura accidentally broadened the scope of its sanctions-related crackdowns.
This isn’t the first time the cryptocurrency industry has had to deal with this sort of issue. For example, an Ethereum software company, ConsenSys, unexpectedly barred a group of Iranian students from its coding academy back in November 2021 due to U.S. sanctions.
OpenSea remains the world’s largest NFT marketplace, hosting over $22 billion in sales since its inception.