Iran will ban cryptocurrency exchanges from operating without a Central Bank license

Cryptocurrencies in the global financial market have long received the status of an innovation that helps to circumvent the sanctions of other states. For example, in Iran, a country with 81 million people, Bitcoin and altcoins effectively help circumvent all United States prohibitions.

In this article we will talk about the state of the cryptocurrency market and blockchain developments in Iran. We’ll tell you how local authorities feel about digital money, and also look at the development of the digital economy for the average consumer.

Mining as an “industrial business”

Let's start with the fact that quite recently local authorities recognized mining as an industrial activity. This in turn means that the Iranian state strongly supports the extraction of cryptocurrency and the mining business. Thus, on July 29, during a meeting of the Iranian Cabinet of Ministers (in Tehran) chaired by the country’s President Hassan Rouhani, cryptocurrency mining was recognized as an official industrial activity.

At the time of writing, all miners and mining companies must obtain a license from the Ministry of Industry and pay taxes for their activities.

Interesting in the section: HashFlare: review of the cloud mining service

Control methods

Government censors constantly monitor network traffic through a process called "deep packet inspection" to restrict access to VPNs and cryptocurrency platforms.

The supply of equipment used to obtain cryptocurrencies is completely prohibited. The responsibility for visiting crypto exchanges will lie with the end user, so third-party resources do not impose any restrictions on Iranians.

Residents of the country are completely isolated, and therefore have no legal opportunity to buy and sell cryptocurrencies using Iranian reals. Such deals can now be carried out face-to-face between Iranians.

Own cryptocurrency

Over the past 14 months, Iran has been working on releasing its own cryptocurrency, PayMon. The coin will be backed by the country's gold and foreign exchange reserves, as well as the reserves of four major banks: Parsian Bank, Bank Pasargad, Bank Melli Iran and Bank Mellat (under the supervision of the Central Bank of Iran).

PayMon means “covenant” in Persian (the country’s official language). It is assumed that the coin project was created to effectively circumvent US sanctions and bans on the payment giant Swift. An earlier press release stated that the crypto project would “help support international trade.”

Iranian authorities block access to Bitcoin exchanges

07/04/2018 Andrey Asmakov

#state#bitcoin ban#Iran

Presumably since May of this year, Iranian users have been experiencing problems accessing cryptocurrency exchanges and other exchange platforms, Coindesk reports.

In particular, difficulties were noted with accessing Binance, Blockchain and LocalBitcoins, even when using VPN and other methods of bypassing blocking.

One of the Iranian cryptocurrency enthusiasts, on condition of anonymity, told the publication that it’s all about the new sanctions that will be imposed on the country in August and November.

“Many people use it [bitcoin] as a risk hedging tool, because it is easier than buying dollars on the black market,” the source notes.

Another factor fueling Iranians’ interest in cryptocurrencies is that the annual rial inflation has reached 127 percent.

“[President Rouhani] doesn't want Iranians to move foreign currencies, especially dollars, outside the country,” says Ahmad Khalid Majidyar, director of the Middle East Institute's IranObserved Project. “If [diplomacy] fails, it will mean further restrictions, and these will definitely affect cryptocurrencies,” the source added.

Most experts agree that the economic situation is forcing the Iranian authorities to impose restrictions on cryptocurrencies. Thus, in April, as part of the anti-money laundering program in Iran, financial institutions were prohibited from working with cryptocurrencies. In May, the head of the economic committee under the Iranian government, Mohammad Reza Pourbrahimi, warned cryptocurrency traders about the harm to the country’s economy if they continue to spend billions of dollars on international platforms.

Now, without warning, official Tehran began a policy of restricting access. Anonymous sources also report that the government inspects user traffic using deep packet analysis tools. Thus, it plans to block access to exchanges even using a VPN.

Another source talks about a ban on buying and selling cryptocurrencies for rials, although people continue to do this in personal meetings. When asked to describe the mood among cryptocurrency enthusiasts in Iran, he answered with one word: “Uncertainty.”

All of these developments mark a sharp turnaround for a country that was on the cusp of a cryptocurrency boom (CoinDesk published a report in 2022 that found Iranians believed the government would support cryptocurrencies). Moreover, as recently as February of this year, blockchain startups actively worked with Iranian regulators to legalize cryptocurrencies in the country.

Let us recall that the day before, the Supreme Court of India upheld the ban on any financial institutions, including banks, on transactions with cryptocurrency, imposed in April by the country’s Central Bank.

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How to start trading on the FTX exchange

The registration process is the same as on other cryptocurrency exchanges.

1. On the FTX exchange website, in the upper right corner, click on the “Registration” tab. Enter your email address and password;
2. Click “register” and wait for confirmation by email;
3. For security reasons, it is better to install 2FA. Click “Account Security” and select Authy, Google Authenticator or SMS.
4. You can now deposit funds into your account. The withdrawal limit will be $1000 until you pass KYC verification;
5. Click “Settings” to complete the KYC verification process and increase withdrawal limits;

Key features of the FTX exchange

Unique and innovative products such as MOVE contracts, leveraged token trading, etc. helped to stand out from other exchanges.

As mentioned above, FTX works with both retail and institutional traders. Low commissions, tight spreads, OTC services, customer support, charts from the TradingView service, mobile applications for IOS and Android.

What else?

1. Deposits/withdrawals for fiat. USD, EUR, CAD, GBP, AUD - all this is available to users. You can also use credit cards to top up your balance on the exchange;
2. Leverage up to 101x . Generous leverage, allowing traders to increase profits;
3. Quick conversion or transfer to stable coins. Users can easily exchange one currency for another in their accounts and trade derivatives using one margin wallet;
4. “Institutional Services” . For large investors, so-called “institutional services” are provided. These include: no restrictions on withdrawal of funds, high liquidity, over-the-counter (OTC) transactions, liquidation fund, etc.;
5. Extensive customer support. FTX integrates various features and resources to help users navigate the exchange. In addition, in special chats that support more than 10 languages, you will get answers to all your questions.

Is FTX suitable for beginners?

Considering the entire list of goods and services that the FTX exchange offers its clients, it becomes clear why the platform is not suitable for beginners. Bitcoin options, leveraged tokens, perpetual swaps, MOVE contracts - all of this requires certain knowledge and time and is not suitable for novice traders.

Derivatives trading is more complex than spot trading. The same applies to leveraged trading, where a negative result will result in higher losses than if you had not used leverage.

FTX products, due to their complexity, are more suitable for experienced traders.

The FTX team does not stand still and is expanding the list of educational resources. These include a “help center”, which contains all the necessary information about cryptocurrency in general. Detailed articles and news announcements also appear regularly on the blog and YouTube channel.

Official FTX accounts are present on social networks such as Twitter, WeChat Group and Facebook. The FTX team also interacts with customers through Telegram, where more than 10 groups have been created in languages ​​such as English, Chinese, Russian, Korean, French and Spanish.

Prompt customer support via chat and email also deserves some attention.

The FTX exchange offers versatile functionality that is suitable for both casual and institutional traders. The high level of liquidity and the absence of withdrawal limits look very attractive. The OTC department is great for large players, and the mobile application for IOS and Android allows users to monitor their accounts 24 hours a day.

In addition to the referral program, the FTX platform has a VIP program for professional traders. Another program called Backstop Liquidity Provider is designed for market makers.

As stated earlier, the FTX exchange is not available in the United States, nor is working with the FTT token. Restrictions on some services also apply to other residents, for example, trading in oil contracts is not provided for citizens of Canada, the USA, the European Union, the UK, Singapore, the UAE, Turkey, China and Hong Kong.

The conclusion suggests itself: using the FTX exchange is recommended for more experienced traders who regularly monitor market conditions.

Cryptonationalism

Overall, the moves represent a sharp turnaround for a country that emerged on the brink of a blockchain boom.

In February 2022, blockchain startups worked closely with regulators. To consider creating a legal framework for cryptocurrencies.

Additionally, in the same month, the Minister of Information and Communications Technology announced plans to create a national cryptocurrency.

With most international banks already shunning Iranians, Majidyar expects the situation to only get worse. However, Bitcoin enthusiasts reported anxiety rather than hopelessness. They continue to trade cryptocurrencies between friends in exchange for local currency.

“They always find a way out of the situation. - said an Iranian crypto enthusiast"

Account on the FTX exchange: levels and limits

The FTX exchange has 3 levels depending on KYC verification. You can withdraw up to $9,000 per day from the exchange without providing any supporting documents.

To understand what you need to move to the next level, see the “Verification” section in this review

If you want to increase your limit, then level 2 will come in handy. You can withdraw as much as you like.

Level 3 also has no limits, but adds the ability to withdraw funds through the over-the-counter (OTC) department.

Collapse

From January 18 to 19, there was a large-scale collapse of the Tehran Stock Exchange, which went down in history as “Black Monday of Tehran.” As a result, the head of the Tehran Stock Exchange and the Iranian regulator, the Securities and Exchange Organization, Hassan Ghalibaf Asl, left both his posts. But news of his resignation did little to quell the investor protests that began the next day. Amid these protests, trading on the TSE was halted and its website was temporarily closed. Investors were dissatisfied not only with the activities of Hasan Ghalibaf Asl, but also with the statements of the Minister of Finance and Economy Farhad Deypasand , who on the eve of “Black Monday” had the imprudence to say that the Iranian stock market is now on the right track and has reached the stage where its work can be trusted. “With the exception of peripheral variables that affect this market, we do not have specific market violations,” investors cannot forgive him for this phrase from the minister.

The collapse of the TSE occurred primarily because the stock exchange was one of the few remaining options to address the budget deficit amid US economic sanctions and the fallout from the coronavirus. The Iranian government appeared to be aware of the risks but, in the absence of an alternative, continued to press ahead with its plans.

While many ordinary investors lost their last funds when the bubble burst, the government managed to record real profits from the explosive growth of the stock market. State-owned companies saw an influx of cash as the government managed to sell shares on time, while the country's treasury passed a massive 670 percent increase in taxes levied on trading, delivering more than 134 trillion riyals ($595 million) in windfall revenue to government coffers at the end of December.

Experts, meanwhile, criticized the government for encouraging the public to invest in the stock market without warning them about the risks. “Instead of creating an environment for professional investment that would benefit the real economy in addition to developing the stock market, the government used short-term opportunities to cover part of its budget deficit,” said Iranian financial analyst Ali Khosroshahi . According to another Iranian analyst, Mehdi Agbaali , the rise in the stock market has, at best, only marginally helped the economy. The only supposed benefit of this bubble, he said, is that it absorbs huge amounts of money circulating in the economy, slowing inflation, which is rising under the combined pressure of US sanctions and the COVID-19 pandemic, which, although it has subsided, still, it's not over yet.

In the two months following the stock market crash, Iran also experienced significant monthly inflation increases of 5.4% and 7.1% as money that was pulled out of stocks was invested in other assets, driving up prices.

Verification on the FTX exchange

If you want to move to level 1 in your personal account, you need to provide the following information:

• full name
• Country of Residence
• region

The withdrawal limit will increase to $2000

Verification page on the FTX exchange

To move to level 2, you need to fill out the form with your data and upload documents confirming your identity and residential address.

For level 3, you will need to upload a bank statement for the account you plan to use for wire transfers.

Commissions on the FTX exchange

Futures settlement occurs without commissions, over-the-counter trading and conversion within your wallet are also free.

If you use leveraged tokens, you will pay 0.10% of the amount for creation and redemption, and there are also daily fees of 0.03%.

If you decide to use 50x leverage, then the fees will increase by 0.02%, and if at 50x, then by 0.03%. All amounts are sent to the so-called “insurance fund”.

By the way, the fee for MOVE contracts depends on the price of the underlying index, not on the price of the MOVE contract.

The picture below shows the tiered payment structure for the spot and futures market:

Storing FTT tokens on an exchange will allow you to reduce fees, but there is no reduction below 0.015%.

Recovery and prospects

Despite the Iranian stock market's winter setbacks, the spring brought relatively positive news. Iran's stock market rose in March, and the country's Securities and Exchange Organization released data on foreign investment over the past 10 months. During this period, the total volume of investments made by foreign investors in Iranian securities doubled. The value of the basket of foreign investments in this market was about 25 trillion rials (about $595.2 million) at the end of the first month of the last Iranian calendar year (April 19, 2022), and at the end of the eleventh month (February 18, 2022), this figure reached 46 trillion rials (about $1.95 billion).

At the same time, the TEDPIX index grew by 8% in the last week of March alone, its value at the end of March amounted to 1.307 million points. The number of foreign investors listed on the TSE and other markets also increased by 100% to a total of 3,600 at the end of March. However, foreign investment on the Iranian exchange continued to grow even in the fall, when trading on the TSE and other markets began to fall.

The positive consequences for Iranian financial markets of Biden's as US President appeared already at the end of January, after the crushing fall of the Tehran Stock Exchange. In January alone, the rial rose 17% against the US dollar after a period of decline in which it lost more than 70% of its value. A Biden presidency also raises the possibility that Iranian oil payments stuck in overseas bank accounts will be released, easing Iran's foreign currency supply crisis. Prospects for the repatriation of billions of dollars belonging to Iran from banks in South Korea and other countries, as well as prospects for the lifting of sanctions on oil exports, are spurring a strengthening of the local currency.

At the same time, it is most likely that the Iranian stock market will experience an outbreak of volatility in the near future. Attention should currently be paid to the “American factor”, or more precisely, the “Biden factor”. TEDPIX soared to a record high in large part because people viewed stocks as a hedge against inflation caused by US sanctions. Many of the large companies listed in the index are exporters of heavy industrial products such as steel, and there is also a significant share of petrochemicals and oil refineries, which benefit from the weaker rial by exporting primarily.

If we take the Iranian stock market as a whole, then for it hopes for the recovery of the Iranian economy in connection with Biden's ascension to the presidency of the United States will be a bullish factor. But this, of course, will not be the same strengthening as the bubble that the Iranian government provoked.

Depositing and withdrawing from the FTX exchange

You can top up your balance with fiat: USD, EUR, GBP, AUD, CAD, CHF, HKD, SGD and ZAR. And also the following cryptocurrencies:

• Bitcoin (BTC)
• Ethereum (ETH)
• Bitcoin Cash (BCH)
• Binance Coin (BNB)
• Litecoin (LTC)
• FTX Token (FTT)
• BitMax Token (BTMX)
• BiLira (TRYB)
• USD stablecoins (USDT, USDC, TUSD, PAX, HUSD, and BUSD)

Advantage 3: There is no fee for topping up your balance with cryptocurrency.

Please note that stablecoin withdrawals may be limited by the rate at which they can be created and redeemed. Large withdrawals can take up to 6 hours on weekdays and up to one day on weekends.

In your account, you can convert various fiat currencies to USD. To do this, press the “CONVERT” button.

If you are replenishing or withdrawing funds for the first time, you should contact support with all questions to avoid loss of funds. The FTX team has prepared a step-by-step video guide that outlines every step when depositing and withdrawing funds from the exchange.