The authorities in Iran continue their crackdown on the unauthorized mining of cryptocurrencies as the demand for electricity remains high. The country’s energy supplier has so far closed more than 5,300 illegal mining facilities and confiscated an enormous number of coin-minting machines.
Electricity company confiscates more than 216,000 mining units from unlicensed miners in Iran
In Iran, where electricity consumption is still higher than usual, preventing blackouts remains a priority. Cryptocurrency miners, most of whom work without a permit, have been blamed for power shortages throughout the summer. The hot weather that year led to increased use of air conditioning, while the low rainfall negatively affected hydropower generation.
The Iranian Power Generation, Distribution and Transmission Company, Tavanir, is constantly tracking down illegal mining operations across the country. According to a recent report from the utility company, the state facility has closed 5,380 crypto farms.
Tavanir also announced that it had seized 216,758 pieces of mining hardware, the English-language business newspaper Financial Tribune reported, citing the ISNA news agency. His estimates show that the unlicensed facilities combined consume electricity equivalent to that of 800,000 households, or two million people.
The power distributor previously claimed that illegal miners use 2,000 megawatts of electrical energy every day. However, that figure was recently rejected by the Department of Industry, Mining and Trade, which called it “grossly exaggerated” as such an amount would be equivalent to the electricity consumption of 3 million mining equipment.
The Iranian government recognized cryptocurrency mining as a legal industrial activity in July 2019. The authorities in Tehran have introduced licensing for mining companies and the permits are issued by the Ministry of Industry. According to Tavanir, 56 authorized crypto mining farms require a total of 400 megawatts of electricity.
In May of this year, Iran imposed a temporary ban on all cryptocurrency mining in an attempt to reduce its electricity deficit. Then, in August, Tavanir announced that restrictions on licensed miners would be lifted on September 22, amid an expected decline in electricity demand towards the end of summer.
While the licensing regime has allowed dozens of mining companies to work legally in the Islamic Republic, the government has raised their electricity prices to match export prices. As of April, authorized miners have been charged 16,574 rials ($ 0.39) per kilowatt hour, four times the original tariff. At the same time, illegal crypto farms are using subsidized energy intended for households and other industries.
Iranian power generation plants produce around 60,000 megawatts of electrical energy with a total installed capacity of over 85,000 megawatts. The country’s electricity deficit is at least 5,000 megawatts a day, according to Tavanir.
Do you think cryptocurrency miners are responsible for Iran’s electricity shortage? Do share your thoughts on the matter in the comments below.
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