OpenSea, an Ethereum blockchain-based digital collectibles marketplace, has made some changes to its terms of use.
NFT marketplace OpenSea has updated its list of prohibited nations, and it’s confirmed that the list is based on U.S. sanctions.

The announcement is a first for OpenSea, which until recently had not taken a position on sellers from sanctioned countries.

Founded in 2017 and based in San Francisco, OpenSea remains the world’s largest NFT marketplace, hosting over $22 billion in sales since its inception. While OpenSea does not allow Chinese entities to sell on its platform due to U.S. sanctions, this is the first time it has taken a stance on individual sellers.

The prohibition means that anyone based in Crimea or Iran will be blocked from accessing the site while using their IP address. Users can still access the site via a virtual private network (VPN).

The change is likely to be welcomed by many OpenSea users, who have been uncomfortable with sales from banned nations for some time.
According to the new terms of service, Russia, Iran and North Korea are among the countries that are no longer allowed to use the platform. The list is based on the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) sanctions list.

The changes come as a result of an investigation by Decrypt into whether OpenSea was blocking sanctioned countries from using its platform.

OpenSea’s founder, Devin Finzer, told Decrypt that the company had never blocked users from sanctioned countries. However, Decrypt discovered at least one instance of a user being blocked for being in a prohibited country—which turned out to be Iran.

Finzer said that at some point during late 2018 or early 2019, OpenSea started blocking users with IP addresses originating from OFAC-sanctioned countries due to “some third party compliance requirements we had at the time,
Today, we made some updates to our list of prohibited nations. The list is available on our website and in the footer of every page. Our sanctions policy is guided by the United States Department of Commerce Bureau of Industry and Security (BIS) and the Office of Foreign Assets Control (OFAC).” but that they later removed those blocks once they no longer needed them—and kept removing them ever since.

This is not a new development, but rather a confirmation of a fact well-known to cryptocurrency users: Certain countries are subject to sanctions that limit the services available to their citizens.

OpenSea confirmed the ban in an update to its terms of service published March 26:

“Due to U.S. law restrictions, there are certain countries from which you may not make purchases on the Services. If you attempt to buy or sell from/to an account located in one of these countries, your transaction will be blocked and then refunded if required by law.”

The list of prohibited nations includes Cuba, Iran, North Korea, Syria and others.

OpenSea, the largest NFT marketplace, has confirmed that it uses a U.S. sanctions list to block users in certain countries, including Iran, Venezuela and Syria.

On Sunday, a user who goes by @NFTIran complained on Twitter that they could not access the site. This prompted other users to verify that they had been similarly blocked.

In response to the complaints, OpenSea confirmed it uses the U.S. Office of Foreign Assets Control (OFAC) list as “a rough heuristic” but promised to review its strategy.

“We do block some locations based on general US sanctions lists, which we use as a rough heuristic since we are a US-based company and don’t currently have resources to evaluate every country individually,” an OpenSea spokesperson wrote in a tweet on Monday.

The spokesperson added that OpenSea is “looking into it more closely and hope to have an update soon!”

In an interview with CoinDesk, OpenSea CEO Devin Finzer confirmed that the U.S.-based NFT marketplace uses the United States Office of Foreign Assets Control (OFAC) list to ban users from certain countries.

Finzer said OpenSea uses a third-party service to check users’ IP addresses on the sanctions list and any user whose IP address matches a country in the list is prevented from using the site.

The way we’ve been working is basically taking the OFAC sanctions list and looking up IP addresses that we receive and preventing those IP addresses from being able to sign up, he said.

The company recently added 26 more countries to the list of prohibited nations in the face of a growing debate regarding international sanctions and Russia’s attack on Ukraine.

Apart from Russia, Iran and North Korea, the list also includes Afghanistan, Belarus, Burundi, Central African Republic (CAR), China, Congo, Cuba, Democratic Republic of the Congo (DRC), Egypt, Haiti, Iraq, Lebanon, Libya, Myanmar (Burma), Nicaragua, Pakistan, Somalia, South Sudan, Sudan and Syria.

According to a blog post from OpenSea published on March 1: “We believe that cryptocurrencies are one of the few technologies that can bypass sanctions for people who live under oppressive regimes and need access to financial services. However, we also recognize that these same tools can be used for money laundering.”

The platform now prohibits all users from Belarus, Burundi, Central African Republic, Democratic Republic of Congo, Crimea Region, Cuba, Ethiopia, Guinea-Bissau, Iran, Iraq, Lebanon, Liberia, Libya, Myanmar (Burma), North Korea (DPRK), Somalia, South Sudan and Yemen.

Additionally, residents of the following countries are prohibited from participating in secondary market activities: Afghanistan; Bosnia and Herzegovina; Guyana; Pakistan; Serbia; Sri Lanka; Syria; Trinidad and Tobago; Tunisia and Vanuatu. Users in these countries can still use the platform to create collections but are not permitted to list or purchase items for sale.

The United States-based non-fungible token marketplace has published a blog post that details why it has banned users from certain countries.

“As a company based in the United States, we have to comply with U.S. sanctions on various countries,” it wrote. “We also feel strongly about not enabling transactions that would support malicious activities.”

PayPal began banning cryptocurrency purchases earlier this week, and OpenSea says it is “actively looking into alternative payment methods for our users.” The NFT marketplace remains the world’s largest, hosting over $22 billion in sales since its inception.

OpenSea members with Iranian IP addresses were told by email that their accounts had been canceled and provided advice on how to withdraw their monies within seven days.

As of publishing, the firm has not responded to several requests for comment, but planned to post an update later today. However, a spokesman for the firm stated in an email that current NFTs from Iranian authors will not be removed off the site.

This new round of deplatforming by OpenSea comes amid rising global tensions in the aftermath of Russia’s invasion of Ukraine, which has prompted several governments to tighten sanctions on billionaires with strong links to Vladimir Putin. However, it is unclear why Iranian users, rather than others, are affected.

At least one banned user who contacted TechCrunch claimed he was “very irritated” by the news and needed answers as soon as possible.

Natasha Dean

With an eye for detail and understanding of this exciting industry. My experience has given me an understanding of crypto trends and how to effectively break them down. I have a soft spot for NFTs and the Metaverse.