Iranian authorities have confirmed the seizure of about 240,000 cryptocurrency mining rigs over the last three years. The confirmation was made by the state electricity company Tavanir on Sunday, as the company bemoaned the state of electricity in the country.
According to reports, Iran has been suffering from power shortages and network instability over the last few months, something that has become a source of worry to concerned higher-ups. According to the CEO of Tavanir, Mostafa Rajabi Mashhadi, the confiscated cryptocurrency mining rigs had consumed electricity estimated to be around 800 megawatts.
In his statement, Mashhadi compared the electricity consumed by the mining rigs to the capacity of the Bushehr nuclear power plant, which he puts at 1000 megawatts. He noted that activities like mining taking place in Iran have put a strain on the country’s national grid, as Iran continues to grapple with a worsening energy crisis.
Despite being one of the biggest suppliers of natural gas and crude oil globally, Iran has found itself in the middle of an emergency energy crisis. In December, the country was rationing power, with government offices operating at reduced hours or being closed up entirely, while schools and colleges moved most of their activities online. Several locations including malls and highways were often enveloped by darkness amid the worsening energy issues.
Iran confirms the presence of illegal mining activities
According to his statement, Mashhadi mentioned that the country still grapples with the issue of residents using the electricity network illegally despite being in the middle of a dire energy issue. “Unfortunately, illegal use of the electricity network still occurs in the country,” Mashhadi said. He also urged the Economic Security Police to ensure prompt cooperation to fish out the remaining illegal miners.
Under the law in Iran, anybody caught in the possession of illegal and unregistered cryptocurrency mining equipment will face the law, translating into the confiscation of the device and a fine of up to three times the value of the illegal equipment. According to Tavanir’s deputy for transmission and foreign trade, illegal miners are still present in the country, putting the figure around 700,000.
The deputy mentioned that these machines consume nothing less than 2,000 megawatts of electricity. He also highlighted that things are taking a turn for the worse as factors like an increase in temperatures and industrial activities also continue to put pressure on the national grid. In a previous statement from the Chairman of Iran’s Power Plants Trade Association, Ali Nikbakht, it is estimated that the country will have an electricity deficit of 25,000 megawatts by next year, which represents one-third of national consumption.
While Iran has continued to confiscate mining rigs, the country has also enjoyed a complicated relationship with cryptocurrencies. Presently, the Central Bank of Iran (CBI) has outlawed the conversion of fiat currency to crypto, banning the primary electronic payment network in the country, Shaparak, from carrying out such services. The country took this route to address the free fall of its currency and its damage to its economy.
The country also announced a ban on deposits and withdrawals from exchanges, a move that occurred after the country’s currency lost 37% of its value against the US dollar. According to records, about one million Iranians had been unable to gain access to carry out crypto services over the last few days.
However, while these bans are in effect, the CBI is taking measures to regulate the digital assets space, releasing a report titled, ‘Policy and Regulatory Framework for Cryptocurrencies’ in December 2024. While the initiative was a step in the right direction, it featured invasive expectations, which required platforms to share private details about traders with the government. While the Iran Fintech Association has objected to the move, it remains to be seen what Iran will do with the assets in the future.
