Iran Continues Crackdown on Illegal Crypto Mining, Seizes Hundreds of Mining Rigs

Authorities in Iran persist with their efforts to curb unauthorized cryptocurrency mining. The state-run power distribution company has recently identified over a dozen underground crypto farms in Tehran and other regions, unplugging hundreds of mining units illegally connected to the grid.

Power Utility Busts 14 Crypto Farms in Homes Across Iran

The Iranian government continues to crack down on unlicensed crypto mining operations. The state-owned Iran Power Generation, Distribution and Transmission Company, Tavanir, has confiscated 227 mining rigs last week. Its employees found the devices in 14 illegal cryptocurrency farms set up by households in different parts of the country.

The mining machines were found in homes during inspections carried out by Tavanir, the utility announced, quoted by Ibena news agency and the English-language business daily Financial Tribune. The coin minting facilities were discovered in the provinces of Tehran, East Azerbaijan, Isfahan, and Khuzestan, the reports unveiled.

Cryptocurrency mining has become a popular source of additional income for a growing number of Iranians. The government legalized the activity in 2019. Entities who would like to operate coin minting data centers need to obtain a permit from the Ministry of Industries and over 50 companies have already done so.

While registered mining businesses are required to pay for the power they use at higher, export rates, private consumers in Iran have access to subsidized household electricity. The available cheap energy and the rising prices of cryptocurrencies in the past year have led to illegal mining farms cropping up across the Islamic Republic.

Both authorized and underground crypto miners have been largely blamed for electricity shortages this summer, when the extraordinarily hot weather increased power demand. In May, authorities imposed a temporary ban on all cryptocurrency mining to reduce the power deficit. Then, in August, Tavanir announced it would lift the restrictions for licensed miners on Sept. 22 when temperatures began to drop.

The power company seizes all the equipment from illegal miners and the prosecutor-general’s office recently banned the release of confiscated hardware until the Iranian parliament decides how to treat unregistered crypto farms and their operators. So far, Tavanir has taken hold of 221,390 mining devices and shut down 5,756 illegal mining facilities. Their owners face fines for damages inflicted on the national distribution network.

According to official estimates provided by the Iranian power utility, crypto farms authorized by the Industries Ministry currently consume around 400 megawatts (MW) of electricity. At the same time, unlicensed miners have been accused of burning almost 2,000 MW daily.

Tavanir has warned about possible power cuts during the winter months when electricity demand increases again amid an ongoing pressure exerted on the national grid by illegal mining operations. “Rising demand for electricity by unauthorized crypto miners is likely to cause blackouts this winter when gas consumption too is at peak as happened in summer,” the company explained. It also complained that current penalties are not tough enough to discourage illegal miners and called for stricter measures.