OpenSea Bars Iranian Users as US Sanctions Talk Ramps Up

OpenSea users with Iran-based internet protocol addresses are claiming their accounts were terminated on Thursday in what is developing into a larger discussion about international sanctions and popular Web 3 platforms.

Multiple users took to Twitter with screenshots showing their account history had been deleted, and users who manage verified collections have reported those collections have been removed.

“OpenSea blocks users and territories on the U.S. sanctions list from using our services, including buying, selling, or transferring NFTs on OpenSea,” a representative of the marketplace told CoinDesk in a statement. “If we find individuals to be in violation of our sanctions policy, we take swift action to ban the associated accounts.”

The U.S. sanctions in question are against the Iranian government, which prevent U.S. companies from providing goods or services to any user based in Iran. OpenSea is a U.S. company headquartered in New York and incorporated in Delaware.

Policymakers have taken a renewed interest in crypto companies' compliance with sanctions amid the Russia-Ukraine war. U.S. Sen. Elizabeth Warren (D-Mass.) asked Federal Reserve Chairman Jerome Powell about that during a Senate committee hearing Thursday, asking whether crypto could be used to undermine sanctions.

"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," she said.

Powell said he's "read that those things happen."

This isn’t the first time the cryptocurrency industry has gone up against a gray area of sanctions laws – Ethereum software company ConsenSys unexpectedly barred a group of Iranian students from its coding academy back in November citing similar restrictions.