Due to Bitcoin and other cryptocurrencies price, continuing its ascending trajectory over recent months and surpassing the prices, everyone considered a dream; It was not a surprise for Bitcoin to appear on the news every now and then.
Therefore, it was not so long before it came appealing to public eye and became some sort of financial pop culture. Everyone loves the get rich quick scheme, especially after hearing about the geeks that turned into millionaires after 3-5 years of holding their mined/bought bitcoins.
Consequently, there has been an unprecedented increase in in global cryptocurrency trading volume throughout the world. No matter which country you reside in, there is so much buzz going on around cryptocurrencies at the moment. With bitcoin reappearing in news every week and celebrities embracing cryptos, bitcoin and cryptocurrencies are not just for geeks anymore. They have truly attracted the attention of ordinary people and non-geek investors.
In fact some of its major investors come from CEOs and men of business who considered cryptocurrencies a joke just few years ago.
Iran is not different from other countries on this matter. In fact, with Iranian Rial (IRR) declining its value to US dollar every year, interest in investing in other currencies continues to rise among Iranian people.
as the only legit way. For this reason, they are gaining a lot of popularity in the country.
Iran is financially isolated from the global market. Iranians cannot buy anything directly from internet using Visa, MasterCard and PayPal. They also cannot earn directly in Dollars or do global trades (such as investing in global stocks market, etc…)
Considering the mentioned reasons, it seems natural for cryptocurrencies to take over in Iran, more than everywhere else. Cryptocurrencies seem to be the real winners in such situation. The nature of cryptocurrencies like bitcoin has prevented governments and global banking systems to impose direct control over them. This has made cryptocurrencies a very appealing asset in Iran.
US sanctioned nations
I remember when I just wanted to start investing in bitcoin two years ago, I began investigating all the official exchanges in Ferdowsi street. with all the internet activity I’d saw about cryptocurrencies I thought there would be a market for them in physical exchanges too.
But to my surprise most of them hadn’t even heard of bitcoin and other cryptocurrencies, let alone trading them. After lots of searching I found a few exchanges which at least knew what bitcoin was. However they told me as of now it’s an illegal currency to trade in exchanges and Iran central bank (which has full control over the monetary system in Iran) hasn’t passed any laws towards them.
To be more precise, up until now Iran central bank has neither accepted nor rejected cryptocurrencies. There isn’t simply just any rules towards them.
This void in regulation has turned Iran a black market for cryptocurrencies. Licensed, certified and physical exchanges cannot simply trade cryptocurrencies. ut there are lots of online and unregulated cryptocurrency exchange websites popping up everyday.
Enamad is the single most important certificate for Iranian online businesses. This certificate which has a rating system embedded in itself (1 to 5 stars), guarantees the legitimacy of the online business and assures users they are safe there. Websites having this certificate, have formerly provided all the necessary information to be traceable and refundable in case something goes wrong (fraud for instance).
Interestingly, none of Iranian cryptocurrency exchange websites have obtained Enamad. The reason behind that is the fact that regulators in Iran doesn’t simply issue this certificate for cryptocurrency related businesses (both online and offline). Despite the fact that some of these websites have Enamad, their certificate has been issued for their other activities and branches (western union, issuing PayPal, Visa, MasterCard , etc.). none of them has certificates for cryptocurrency trading, which is very worrying for customers.
Currently there are 5 methods which you can trade cryptocurrencies in Iran. Each of them has their own merits and demerits. First, they will be introduced in the table below and then each one is discussed in details.
Trading via Iranian online cryptocurrency exchanges
|Fast buying & selling through Iranian online payment gateways||· Buying at a much higher rates than actual Dollar price
· Selling at a much lower rates than actual Dollar price
· With Bitcoins & cryptocurrencies being so rare & scarce in Iran, It’s not a surprise that online exchanges will be emptied at peak periods and so many potential buyers couldn’t get their hands on bitcoins
· Bitcoin Withdrawals sometimes require up to two hours (in some exchanges)
· They usually require registering your national IDs and other KYC related certificates & documents
|High risk due to not having an official trade certificate|
· Trading via the world’s biggest and most reliable exchanges
· Buying & selling at actual Dollar price
· Most cryptocurrencies are always available
· Getting and using Visa/MasterCard is only possible through middlemen and still imposes many risks
· Using PayPal is very risky for Iranians (PayPal has blocked so many Iranian accounts before)
· verified accounts in exchanges (such as bitfinex) are very hard to obtain for Iranians
· some American exchanges such as bittrex completely block Iranian accounts without prior notice
Risks of getting blocked from accessing PayPal/Visa/MasterCard
Risk of getting blocked by using unverified Exchange Accounts
· Buying & Selling at actual Dollar price
· Converting Webmoney to bitcoins, directly in Webmoney panel
· requiring middlemen to create accounts, deposit and withdrawals
· less credible than Visa/MasterCard, PayPal
· limited number of cryptocurrency exchanges accepting Webmoney and perfect money
· Possibility of exchanges, declining support for Webmoney /perfect money payments in future
· Possibility of discontinuing the direct Webmoney to bitcoin converting in Webmoney panel
· Under the influence of Russia and Hong Kong policies towards Iran and cryptocurrencies
· Lack of support from the most secure exchanges
· Trading directly with Iranian Citizens
· Paying via conventional Iranian money transfer methods
· Not requiring registration or KYC identifications
· Small number of Iranian traders on these websites
· Limited Supply (since this websites offer peer to peer trades, usually the trading volume is not very large)
The anti-scam Escrow system in these websites guarantees trading assurance
· Finding buyers and sellers everywhere (online & offline)
· payments in every conventional form of payment such as cash, cheque or even trading with real assets like Gold
· Possibility of arranging a face to face meeting in real world
· No need to register any national ID, certificate or any Document
· Could be totally anonymous
· No third party service or middlemen helping the process of trade
· Challenge in finding trusted buyer and seller
· Difficulties in gaining trust
There is no way you can trust the other party.
only trade with reputable people or someone you know.
Before explaining these five trading methods in details, let’s point out the main difference between Iranian & global cryptocurrency exchanges.
Iranian cryptocurrency exchanges are completely different from the most well-known cryptocurrency exchanges. Both in their nature and the way they operate.
Iranian exchanges, on the other hand, act quite different. They themselves play the role of buyer/seller. There is no trading between users and there are no provided wallets to keep users digital assets.
These Iranian websites, first buy cryptocurrencies from global exchanges via PayPal, etc. (Because, it’s a complicated process for normal people to do so) and then sell them to their users on much higher value. They even buy cryptocurrencies at much lower prices (compared to their sale price) and sell them on much higher prices to other users.
Basically, you could say they are just dealers and it is totally true. As you can probably see, they are the easiest way to get your hands on cryptocurrencies in Iran, but not definitely the best way.
Another downside to this business model is the fact that the cryptocurrency supply is heavily dependent on exchanges. They are the ones who buy new cryptocurrencies from the global market and inject it to Iranian markets. This has caused a lot of shortenings. Whereas in global exchanges, these are the people who control the flow of cryptocurrencies.
A few years ago, there were barely a couple of online cryptocurrency exchanges in Iran, with very low amounts of supply. But after the cryptocurrency going mainstream for the past couple of years, there are new cryptocurrency exchanges popping up every week in Iran. Of course with much more demand they now provide more supply than before (although still not enough supply to meet the current demand).
Digiarz.com is a website that lists the most legit cryptocurrency exchanges in Iran based on their buy/sell prices and the positive & negative reviews they get from their users.
Perhaps the biggest advantage of trading though these websites is the ease and convenience of sending and receiving assets. The most widely accepted online payment method is paying by bank debit cards and this is how most of these websites operate.
They are considered the fastest and the easiest method for buying cryptocurrencies. And the reason behind that is they use online payment gateways which is the fastest and the easiest method in Iran.
Logos of the biggest and the most reputable banks in Iran, issuing debit cards for online purchases
Having an online debit card payment gateway for websites in Iran is a kind of certificate for being a legitimate business. However, that’s not enough, since the most valid certificate for Iranian online businesses is Enamad.
Trust: the only source of trust for these websites is through reading reviews in Digiarz.com, social media such as Telegram groups and so on. There is always a need for brave users to try new websites for the first time and share their experience with others.
Low supply: since buying cryptocurrencies via PayPal, Visa/MasterCard involves a lot of hurdles, most of these exchanges cannot keep up with the demand of buyers and that results in even higher cryptocurrency prices than their actual value based on dollar price.
It’s usual for these websites to run out of all their assets in one hour, when bitcoin is very cheap and in its peak demand period.
Hoarding: a lot of these websites have been accused of hoarding their assets when bitcoin prices are low, and selling them later at higher prices. They do this by simply showing messages about running out of their supply on their websites, but many buyers believe it’s fake and they are just bluntly hoarding.
Black market: Because of the limited supply of cryptocurrencies in Iran, when most websites run out of their bitcoin supplies, the few remaining websites offer their bitcoin on even much higher rates than before. Abusing buyers in every way they can.
Selling high, buying low: as previously mentioned one of their main sources of income is buying at much lower rates from their users (compared to real bitcoin USD value) and selling them at much higher rates to their other users.
Selling a very limited variety of cryptocurrencies: Most of these websites only offer bitcoin & Ether and nothing more. However, there are some of them who sell top 10 cryptocurrencies (based on coinmarketcap.com), but usually their supply for other cryptocurrencies is very low.
Of course this is not much of a big problem compared to other problems mentioned above. Users can easily trade their bitcoin & Ether with other cryptos in global online cryptocurrency exchanges like Binance, Bitfinex and others. But add to that, the volatility of global exchanges banning Iranian accounts and you have a big issue at your hand. Bittrex, for instance was one the biggest ones to suddenly ban all Iranian accounts without any previous notice.
Requiring of registering with a lot of official national certificates (KYC policies):
Although KYC policies require most cryptocurrency exchanges throughout the world to receive national IDs and other verification documents, Iranian exchanges are very hard on this matter. Maybe they are acting ahead of time, so when cryptocurrency trading will be regulated in Iran, they won’t have any problems with law.
This highly prevents money laundry and all sorts of illegal financial activities.
As previously mentioned, without issuance of the Enamad for these websites, there is really no assurance for their customers.
In the worst case scenario if you pay in IRR (Rials) and don’t receive bitcoins or worse, if you sell them bitcoin and don’t receive the equivalent in IRR (Rials), they can easily claim you have sent bitcoins to a wrong wallet. In these cases there is legally nothing you can do about it. Because you attended in a business which is not covered in law in the first place.
Because of unpleasant experiences with Iranian cryptocurrency exchanges in Iran, many people tend to use middlemen and get their hands on Visa/MasterCard & PayPal to do their trading with the most renowned exchanges on the internet (GDAX, Bitfinex, etc.). (not to mention that these middlemen are very expensive too)
Most of biggest cryptocurrency exchanges require their users to provide authentications documents (National IDs and ….) to verify their accounts before they can start trading. The aforementioned middlemen in Iran, actually hand you a lot of third party certification documents to help you along the process of verification.
Access to the most reputable online cryptocurrency exchanges by the likes of GDAX, Bitfinex, Binance, CEX.io and many others.
Trading on real BTC/USD value.
Trading with other users in the exchanges, unlike Iranian Exchanges which in fact are only dealers.
Much more cryptocurrency supply: As longs as there are users who want to sell their bitcoins, there will be enough bitcoins for everyone to get their hands on.
Providing wallets for different cryptocurrencies (none of Iranian exchanges offer this service)
Hardships and complications in verifying accounts for these exchanges (for Iranian users).
Complexities of getting and verifying PayPal accounts, Visa and MasterCard for Iranians.
Using PayPal also requires VPN or VPS Services in order to not being banned (because of US financial sanctions over Iran).
If you factor out a few big hack incidents for exchanges like Mt. Gox or Coincheck, since most of these exchanges use cold storage wallets to store their users assets, they are considered as the most secure way to trade your digital assets. But it is heavily recommended to not store your assets in them for long periods.
However for Iranian people, risks of getting caught using fake verified exchange or PayPal accounts always remains relevant. If they caught all their investments will be blocked and perished, with no legal right to take them back.
Webmoney and Perfect Money are some of the most popular alternative online payment methods for Iranians who find using PayPal and Visa/MasterCard very hard.
Despite the fact that these Russian and Chinese payment services still require middlemen to create verified accounts and deposit, they are still a very popular option in Iran, among pro traders. The reason behind that is the fact that, they are at least so much more feasible than Iranian cryptocurrency exchanges.
To be quite realistic, Webmoney and perfect money aren’t such legit ways of doing payments compared to services like PayPal and other popular payment systems you see everywhere on the web.
Not many exchanges accept Webmoney/perfect money as a payment method. Chances are even some of those who support it right now, abandon it in the future.
For Iranian users, there is still a need for middlemen, for opening accounts, deposits and withdrawals (to IRR).
Exchanges and websites accepting Webmoney and perfect money are not very well known for their security measures (except localbitcoins)
Since Webmoney operates under Russian government laws, it is possible if it decides to dismiss its cryptocurrency wallets.
Buying and selling bitcoin through escrow websites like Localbitcoins.com is one of the most popular and secure ways to trade bitcoins in a semi peer-to-peer fashion.
Websites like Localbitcoins.com and Localethereum.com let you filter through their list of buyers and sellers based on country, location, payment methods and currency of choice (e.g. Iranian Rials). Once you find the desired seller, you could start an open trade with them and set your terms in the chat. Then they are obliged to deposit the bitcoins in the website escrow. from there you can pay the money in any conventional way agreed upon by both party and then receive your bitcoins.
The desired payment method for most of the trades between Iranian is bank transfer via debit cards. Despite the fact that these kind of payments are the easiest form of payment in Iran, there aren’t so many Iranian traders in these websites. The only reason which comes to mind is that most Iranians haven’t even heard of such websites. Most of them use telegram groups to start peer-to-peer trades (which is a lot riskier)
Trading with other Iranians.
Trading with IRR (Iranian Rial), doing payments through conventional Iranian payment methods (such as bank transfer by debit cards, or even cash).
Trustless trades using provided escrow system.
No need to upload verification documents such as National IDs, etc.
Small number of Iranian users on these sites. Currently, these sites are not well known in Iran, and as a result, the number of sellers and buyers in Iran is very low.
Limited Supply. Since in these kind of websites, trade volumes directly depend on the number of users, hence small number of Iranian users results in very low trading volumes. This means if you are looking for buying or selling high amounts of bitcoins/ethers, you won’t probably find anyone to trade on these websites.
they require chatting and negotiating beforehand and for this reason, trading isn’t fast enough for many situations when prices are fluctuating constantly.
The escrow system guarantees your trade security in the background. You don’t have to worry about other party scam. The whole trade process is trustless.
This method is purely peer-to-peer and there is no middleman or even escrow service in between.
In this method, traders usually find each other in group chats (telegram groups are very popular in Iran) and negotiate terms of trade. Sometimes, if possible, they arrange meetings in real world to get acquainted and know each other better before doing any trade.
Payments in this method can be done in any conventional method, accepted in Iran. Such as debit cards, bank transfers, cash or even bank cheques.
Finding traders everywhere. Usually done online in Telegram groups, Instagram and Facebook groups (Telegram is the most popular option in Iran)
Face to face real life meetings and trading (can compensate the lack of trust to a degree)
Very fluid terms of trade (both parties can change their preferences at any stage)
Payments can be done in many ways such as debit cards, bank transfers, cash or even bank cheques.
No need for registering in any websites, uploading any verification document, etc. However both parties can ask for national ID cards if necessary.
No central system for organizing different stages of trading. This could be risky.
Due to cluttered chat groups, finding people to buy or sell could be challenging for some people.
It is so hard (and unwise) to trust people you don’t know and start trading them without any central authority or escrow system.
they require chatting and negotiating beforehand and for this reason, trading isn’t fast enough for many situations when prices are fluctuating constantly.
Since there is no central authority, escrow system or middleman in the trading process, both parties can turn out to be a scam. There are lots of ways a trading can go wrong (fake cash, invalid bank cheques, etc.). So there are lots of risks to this kind of trading and it is advised that you only do it with the ones you know and trust.
If I want to write a brief summary on best ways to trade bitcoin and cryptocurrencies in Iran, we could follow the steps below.
If you have access to Visa/MasterCard or PayPal through your relatives in foreign countries, or if you are comfortable using middlemen to get your hands on these services, the best way is to trade cryptocurrencies in global online exchanges (such as GDAX, cex.io, Bitfinex, ….)
The second option would be escrow websites like Localbitcons and localethereum. However they require chatting and negotiating beforehand.
If you are still comfortable with the concept of using middlemen, the next option for you is using Webmoney and perfect money.
The next option could would buying or selling via Iranian online global exchanges (List in Digiarz website)
The last option (which we don’t recommend) is buying it in a completely peer-to-peer manner without any middlemen. But only do this when you fully know and trust the other party.
Despite many negative aspects that we discussed about Iranian online cryptocurrency exchanges, they are still considered the fastest and easiest way of buying cryptocurrencies. And the reason behind that is they use online payment gateways which is the fastest and easiest way of payment In Iran.