OpenSea Updates List of Banned Countries, Sparking Decentralization Debate

U.S.-based NFT marketplace OpenSea has reportedly begun banning Iranian users from its platform, sparking outrage among NFT collectors and sparking a new debate about decentralization in the crypto space.

On Thursday morning, Iranian OpenSea users began tweeting that their accounts had been deactivated or deleted without prior warning. Iranian NFT artist “Bornosor” vented their displeasure to their 4,700 followers in a tweet that quickly gained traction, garnering 342 retweets and over a thousand likes within a few hours.

"Woke up to find my @opensea trading account deactivated/deleted without notice or explanation," Bornosor said.

A spokesperson for OpenSea told Cointelegraph that it reserves the right to block users based on sanctions.

"Our Terms of Service expressly prohibit sanctioned users or users from sanctioned regions from using our services. We have a zero-tolerance policy for use of our services by sanctioned individuals or entities and persons located in sanctioned countries. If we find that an individual Violations of our sanctions policy, we will take swift action to ban related accounts."

Current U.S. sanctions prohibit U.S. companies from supplying goods or services to any user in countries on the sanctions list, including Iran, North Korea, Syria and now Russia. OpenSea is an American company headquartered in New York.

These actions by OpenSea have sparked new debates about whether large blockchain-based companies and services are sufficiently decentralized, with MetaMask joining the sanctions-based crackdown.

According to MetaMask’s Twitter account, Venezuelan users were accidentally banned from accessing their MetaMask wallets after blockchain development firm Infura unexpectedly expanded a sanctions-related crackdown.

Digital assets, both cryptocurrencies and non-cryptocurrencies, continue to come under increasing regulatory scrutiny from the U.S. government as it ramps up economic sanctions against Russia.

OpenSea remains the largest NFT marketplace in the world, boasting over $22 billion in sales since its inception.

This isn’t the first time the cryptocurrency industry has been embroiled in turmoil surrounding a tangled web of international sanctions — multiple cryptocurrency exchanges have been embroiled in debates surrounding the freezing of crypto assets in Russia. Binance, the world's largest exchange, has refused to block the accounts of "innocent" Russian customers.