Gitcoin, a crowdfunding platform, discontinued a campaign aimed at helping Farsi-speaking students learn Ethereum coding, in another sign U.S.-based cryptocurrency companies are becoming extra cautious about obeying sanctions.
However, the volunteers remain bewildered: Despite blockchain technology’s promise of a borderless future without discrimination, real-world politics still rule.
“It was really a big shock,” one of the course’s creators, Sahar Rahbari, told CoinDesk.
Kyle Weiss, Gitcoin’s chief operating officer, said it shut down the campaign not just because it was somehow related to Iran (where Farsi is spoken), but that “the grant had in its description that it was financially supporting people in a sanctioned nation, which is an OFAC violation.”
A spokesperson for U.S. Treasury’s Office of Foreign Assets Control referred CoinDesk to its webpage detailing Iran sanctions.
“There are other Farsi community grants on [the] platform that we are proud to see receive funding,” Weiss told CoinDesk by email. “In this case, the education they are providing was immaterial in our decision (we are unsure if they filed for an exemption to provide the education to individuals in a sanctioned nation). The problem was with them transferring funds to people located in a sanctioned nation.”
The grant proposal mentioned Farsi-speaking individuals “from Iran,” which gave Delaware-incorporated Gitcoin’s team pause, Weiss said.
“The grant’s details could be perceived a number of ways, but given our team’s ability to really discern the truth and the liability we assume as a U.S. entity, the decision was made to mark their grant inactive as there was too much doubt,” he said.
Even though U.S. sanctions on Iran do not forbid educational activities outright, there are some caveats, sanctions experts previously told CoinDesk.
Plus, the sanctions regulations haven’t been written with regard to online courses, so the interpretation of what is and is not allowed there might get tricky for U.S. companies.
Abundance of caution
Gitcoin grants work like this: First, the application receives contributions from the community to its Ethereum wallets. Then, Gitcoin matches the sum raised with the corresponding amount of DAI, the dollar-denominated stablecoin, from the project’s treasury.
Ann Brody, a PhD student focusing on Ethereum, told CoinDesk she helped to write the grant proposal and put it on Gitcoin on Dec. 7.
Brody’s application only lasted one day. The day after she published it she got an email from the Gitcoin team saying the grant “may violate U.S. law,” so the grant was rendered inactive “out of an abundance of caution.”
“Our North Star remains facilitating the buildout of the open web, and staying true to this goal sometimes requires erring on the side of caution to protect the greater mission,” read the email, shared by Brody on Twitter.
Gitcoin, in turn, explained the situation in a Twitter thread, saying that a journalist reached out to Gitcoin asking about the team’s attitude toward U.S. sanctions.
The reporter (not named in the thread) cited ConsenSys’ ban of Iranian students from its coding bootcamp and asked if Gitcoin “has less liability than ConsenSys Academy.”
That brought attention to the grant from the Gitcoin team, and after talking to legal counsel they decided to shut down the campaign: “If we had not taken action, then we could have jeopardized the entire network,” the thread said.
The team added that, although Gitcoin is working on making the funding process more decentralized, “our current cGrants platform is hosted by the U.S.-based entity which will continue to follow U.S. laws and regulations.”
Paying it forward
The grant, proposed by an informal group called Women in Blockchain Farsi, is supposed to fund the work of volunteers who put together an Ethereum mentorship program, one of the contributors, Sahar Rahbari, said.
The course will consist of video content and Q&A sessions. It will be available for free; to compensate the volunteers like Rahbari, the team aimed to raise $7,500 in ether and fiat currency.
The course essentially grew out of the initiative ConsenSys Academy, the Ethereum powerhouse’s educational branch, started last year and shut down this autumn.
Seven Iranian women attended the online coding bootcamp in 2020, funded by grants from the local non-profit CoinIran.
This summer, the program’s graduates decided to pass on their knowledge, developing an Ethereum coding course in Farsi for 35 selected students.
Then the crew decided to go further and publish the course content for free. This can help not only Iranians, the grant proposal underscores: Farsi-speaking people live also in the Asian nations of Afghanistan and Tajikistan. The course is scheduled to go live this week.
Giveth, the platform that took over the campaign from Gitcoin, did not comment by press time.
U.S. companies’ skittishness is unfortunate, but understandable even to those affected by the situation, said Aisha Amin, a ConsenSys Academy alumna and a course contributor.
“Even if there are no strict rules on some areas, when it comes to us [Iranians] there may be legal troubles. That’s why they prefer to keep us away,” she told CoinDesk.
Virgil Griffith’s shadow
The outcome of Griffith’s case definitely influenced Gitcoin’s decision, Weiss said. “Let’s not forget the Virgil Griffith story where, tragically, someone who gave a presentation has been charged with very severe crimes and is now in jail.”
Gitcoin co-founder Scott Moore echoed the sentiment, adding that Griffith’s case rattled the Ethereum community. Now, people who traveled to North Korea with the developer, even without giving speeches, “are worried about their safety,” he said.
“At the time, no one expected that his trip to North Korea, just to give a lecture, was going to result in one of the most serious cases the industry has seen. It was a massive tragedy both for him personally and for Web 3 and, to Kyle’s point, we have a responsibility to ensure that donors or others who have generously supported us in the past (including the Ethereum Foundation, which has similar restrictions related to OFAC rules) were not put at risk,” Moore said.
“We must always move carefully and live in the present to achieve the future we want to see,” he said.
CORRECTION (Dec. 21, 2021, 09:50 UTC): Corrects description of the way Gitcoin grants work.
UPDATE (Dec. 21, 15:00 UTC): Changes verb in headline to “hampered” from “canceled.”
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