Iran's crypto mining industry is facing a widespread illegal mining crisis. Authorities estimate that over 95% of the country's 427,000 lively mining devices operate without permits.
Akbar Hasan Beklou, CEO of Tehran Province Electricity Distribution Company, said on Sunday that Iran has develop into the world's fourth-largest crypto mining hub, fueled by the country's heavily subsidized electricity prices, which have made it a “paradise for illegal miners.”
These unlicensed operations eat greater than 1,400 megawatts of electricity across the clock, placing an enormous strain on the national grid and threatening the soundness of the electricity supply.
Beklou noted that almost all illegal miners disguise their activities as industrial facilities to achieve access to cheaper electricity.
Iran's low-cost cost of Bitcoin mining. Source: Bitcoin Archives
Iran closes 104 illegal crypto farms
Authorities have stepped up their crackdown on illegal operations. In Tehran province alone, 104 unauthorized mining farms were closed and 1,465 machines were confiscated, such as the electricity consumption of just about 10,000 households, Beklou said.
The government has identified several hotspots for illegal mining, including Pakdasht, Malard, Shahre Qods and the commercial areas of southwest Tehran. Inspectors have uncovered farms and factories hidden in underground tunnels that use subsidized electricity connections to avoid detection.
Beklou said specialized inspection teams are working with law enforcement to disrupt these operations.
Iran offers a bounty to residents who report illegal mining
In August, Iran announced that it was offering money rewards to residents who report illegal cryptocurrency mining operations. The CEO of state-owned utility Tavanir, Mostafa Rajabi Mashhadi, announced that whistleblowers would receive 1 million toman (about $24) for every reported unauthorized mining device.
According to a June report from CoinLaw, Iran ranks fifth globally in Bitcoin (BTC) hash rate distribution, contributing 4.2% of the network's total computing power. The United States leads the way in which with 44%, followed by Kazakhstan (12%), Russia (10.5%) and Canada (9%).
