Iran has shut down nearly 7,000 illegal crypto mining operations as it looks to solve its energy crisis

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Iran has shut down nearly 7,000 illegal crypto mining operations as it looks to solve its energy crisis
Representative imageBI India
  • Iran has shut down nearly 7,000 illegal crypto mining operations since the crackdown began in 2020.
  • The country is currently mulling over increasing the fine and adding jail time to the penalties for illegal crypto mining operators.
  • Iran was among the first countries in the world to legalise crypto mining back in 2019.
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Authorities in Iran have shut shop on 6,914 crypto farms operating in the country without a valid licence over the past two years. The local authorities have been cracking down on illegal crypto mining operations since 2020 when the management of the national power grid started to point the finger at crypto mining for putting on Iran’s energy supply.

According to an Iranian news publication, these crypto farms burnt through around 645 megawatts of power while conducting their operations without permission. The authorities peg that this amount equals the annual consumption of three regions within the country — North Khorasan, South Khorasan, and Chaharmal-Bakhtiari.

The Middle-East nation was among the first countries in the world to approve crypto mining as an industrial activity back in 2019. Since then, the country has established a licensing regime that requires crypto miners to have a licence, identify themselves, pay a higher tariff on energy consumption and sell their mined Bitcoin to the government.

As a result, many crypto miners in Iran have chosen to conduct their mining activity illegally in order to take advantage of subsidised electricity rates.

Things could get worse for illegal crypto miners in Iran


In September, the authorities reportedly confiscated over 220,000 mining hardware and shut down nearly 6,000 farms. Six months down the line, another 900 have been added to the list.

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With the number of illegal crypto mining operations still on the rise, the apex power generation authority in Iran is currently mulling over increasing the penalties for unauthorised crypto mining operations.

As things stand, miners have to pay a fine and compensate for the damages they cause to the electricity network. Under the new regulations, not only will the monetary fine be higher, but could also include jail time.

The increased penalties include raising fines by at least three and at most five times, imprisoning the offender, and revoking the offender’s business licence.

Statement by Mohammad Khodadadi Bohloui, an official with Iran’s power generation company Tavanir

As Iran tries to solve for its crypto mining conundrum at home, the International Monetary Fund ( IMF) believes that there is a much larger narrative at play. According to the apex financial authority, countries like Iran may eventually use crypto mining to evade sanctions.

The sanctions have led to massive inflation and food prices rising by over 300%. The AP news agency reported that inflation in Iran has soared to 40%— the highest level since 1994. Smuggling of Iran’s highly subsidised bread into neighbouring countries of Iraq and Afghanistan has also spiked as hunger spreads across the region.

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