I like to joke that any proof-of-work crypto like Bitcoin and Ethereum puts the control over transactions into the hands of organized crime and/or a few guys in China (the best humor being true, of course).
So what if those few guys in China get in bed with the Iranian government? In that case, run-of-the-mill organized crime is the least of your worries.
This situation hit the news this week, as this article for 8BTC explains. According to the Iran press PressTV, Chinese crypto miners have been looking into moving operations to Iran.
Given the fact that they’re getting subsidized electricity in China, why would they do such a thing? Because the Iranian government has a vested interest in violating the draconian sanctions that the US has imposed on them. Crypto is the perfect solution.
I cannot overstate the danger crypto mining in Iran places on any US person transacting in Bitcoin, or any other permissionless proof-of-work crypto. Because every miner processes every crypto transaction, you can be sure that your transactions are taking place in Iran – as well as every other shady corner of the world running mining rigs.
As a result, all US-based Bitcoin traders are violating US sanctions with every trade.
The US government does not look kindly on sanctions violators. “Punishment for violations of the sanctions can be severe. Civil fines range from $11,000 to $1 million for each violation,” explains the web site of Smith, Gambrell & Russell, LLP, Attorneys at Law. “Civil fines may be imposed even if the violation was committed unknowingly and with innocent intent.”
What if you know you’re violating sanctions? “Additionally, criminal penalties may be levied for willful violations and include fines from $50,000 to $10 million and imprisonment from 10 to 30 years,” the attorney site continues.
If you’ve read this article and you’re still trading crypto, you now know you’re violating sanctions. You’re welcome.