Iran prepares fresh crackdown plans targeting illegal crypto mining

Iran is set to initiate a new round of crackdown on illegal mining operations in the country. The country is presently facing a widespread illegal crypto mining crisis, with authorities noting that over 95% of the active 427,000 mining devices in the country are being operated without standard licenses and authorization.

This development comes amid a report that places Iran in the fourth position when it comes to the largest crypto mining hubs worldwide. The report claims that the position was fueled by the heavily subsidized electricity prices, which have made the country a paradise for illegal crypto miners.

These unlicensed operations have consumed more than 1,400 megawatts of power around the clock, putting great strain on the national grid and threatening the stability of the electricity supply in the country.

Iran shuts down illegal crypto mining operations

According to Akbar Hasan Beklou, CEO of the Tehran Province Electricity Distribution Company, the majority of the illegal miners in Iran disguise their activities as industrial facilities because of their access to cheap electricity. Beklous added that since the launch of the government’s effort against unauthorized crypto mining, about 104 illegal mining farms have been discovered in Tehran Province, with authorities seizing more than 1,465 mining devices.

He mentioned that total energy consumption as a result of the criminals’ activities is around 3,359 kilowatts, which is equivalent to 10,000 household units. He mentioned that as a result of their activities, there has been reduced stability in power supplies to both residential and industrial consumers in the country.

He added that over 95% of these devices are operated using unauthorized electricity, increasing the menace of power theft, wasting subsidized energy, and reducing the available electricity for legitimate users.

In addition, he claimed that the government has also identified several hotspots where these activities are rampant. They include Pakdasht, Firuzkuh, Shahre Qods, Malard, Kahrizak, and industrial zones in the southwestern area of Tehran. He highlighted that during the crackdown in the first half of this year, about 80 unauthorized farms containing more than 1,300 mining devices were uncovered, with the farms consuming a cumulative power that can be used by 8,000 households.

Beklou promises to intensify efforts

Beklou said illegal crypto miners often go to great lengths and use sophisticated methods to conceal their electricity theft and illegal operations. For example, they dig underground tunnels, bury mining devices, and tap into subsidized industrial power lines, which makes detection difficult.

Nevertheless, Beklou added that specialized inspection teams from the power company, working alongside security and law enforcement agencies, will continue to monitor these activities, with an aim to dismantle all illegal operations.

Iran has been moving swiftly in its quest to combat this menace. In August, the country announced cash rewards to citizens who report illegal cryptocurrency mining operations. Mostafa Rajabi Mashhadi, CEO of state-run utility Tavanir, announced a reward of up to $24 (approximately 1 million toman) for every informant with credible information that leads to the seizure of an unauthorized mining device.

Mashhadi blamed the activities of the illegal miners for the issues with the country’s power grid. According to a June report by CoinLaw, Iran ranks fifth globally in Bitcoin hashrate distribution. The country contributes 4.2% of the total network’s computing power. The United States leads the group with a dominant 44%, with Kazakhstan picking up the second spot with 12%, while Russia at 10.5% and Canada at 9% take up the rest of the spots.

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