TL; DR Breakdown
- The Iranian government is cracking down on illegal mining.
- Unauthorized mining is contributing to power shortages in the country.
The government of Iran is busy regulating crypto mining. The authorities are carrying a severe crackdown on illegal mining.
The state-run power supply company, Tavanir, has identified several crypto firms in Tehran. So, the authorities have unplugged a good number of illegal mining units tapping on the power grid.
The state-owned power supply company has so far impounded 227 mining rigs over the past week. The employees have discovered these devices in 14 illegal crypto firms.
According to Tavanir, they seized the illegal mining tools in various homes during a random inspection. The rigs were in the cities of Tehran, Isfahan, East Azerbaijan, and Khuzestan. The report added.
Authorized crypto mining is encouraged
Mining has been legal in Iran since 2019. To most Iran citizens, crypto mining is an important source of extra income. But, for a company to start minting, they need a license from the ministry of industries.
So far, more than 50 firms have secured approval to mint. The registered firms have access to power connectivity. They pay a higher fee like the export rate. Yet, private consumers use subsidized household electricity.
The access to subsidized energy and the growth in cryptocurrency prices contributes to the rise of illegal mining across Iran.
The temperatures were very high during the summer, leading to an increased demand for electricity to run coolers. Thus, Iran experienced an acute shortage of power. As a result, both illegal and certified crypto mining firms shared blame for the deficit.
The situation forced the government of Iran to ban all crypto mining activities in May to manage the power shortage. Later in August, Tavanir said it would lift the ban for authorized miners when temperatures started to drop.
Seized equipment to remain in government possession
Tavanir impounded the equipment from illegal miners. Besides, the office of the prosecutor has suspended the release of held machines.
It argues they can only issue the tools after the parliament brings law on handling unlawful crypto firms and their operators.
To date, Tavanir has impounded 221,390 mining tools and closed 5,756 unlawful mining centers. Besides confiscation, the owners are facing charges for damages to the national power grid.
From the records, authorized crypto firms use about 400 megawatts of power. But, illegal firms might be using around 2,000 megawatts daily.
Tavanir is foreseeing a possibility of power rationing during the winter. The company feels that the demand will increase, and the illegal connections by miners on the primary grid are not helping.
Through a statement, they said that illegal crypto miners had put more pressure on electricity. Tavanir feels this might lead to power outages during the winter as gas consumption is at its peak.
Tavanir lamented the current penalties. They feel the penalties are so soft that illegal miners don’t fear them. Therefore, they called for stiffer penalties.