Widespread Unauthorized Mining Operations
Iran’s cryptocurrency mining sector is grappling with a significant illegal mining problem that’s putting strain on the country’s power infrastructure. According to recent official statements, more than 95% of the nation’s 427,000 active mining devices are operating without proper authorization. That’s a staggering number when you think about it – nearly all mining activity happening outside the regulated framework.
Akbar Hasan Beklou, who leads the Tehran Province Electricity Distribution Company, revealed these figures during a Sunday announcement. He noted that Iran has climbed to become the world’s fourth-largest cryptocurrency mining center. The main driver behind this growth appears to be the country’s heavily subsidized electricity rates, which have created what he described as a “paradise for illegal miners.”
Power Consumption Concerns
The scale of energy consumption from these unauthorized operations is substantial. These mining activities are consuming over 1,400 megawatts of electricity continuously throughout the day. That’s putting significant pressure on the national power grid and raising concerns about the stability of electricity supplies for regular consumers.
What’s interesting is how these operations manage to fly under the radar. Most illegal miners apparently disguise their activities as legitimate industrial facilities to access cheaper power rates. It’s a clever workaround, but one that’s causing real problems for the country’s energy infrastructure.
Crackdown Efforts Intensify
Authorities aren’t standing by idly. In Tehran Province alone, they’ve shut down 104 unauthorized mining farms and seized 1,465 mining machines. To put that in perspective, the energy consumption from these seized devices was equivalent to what nearly 10,000 households would use.
The government has identified several key areas where illegal mining is particularly concentrated. Places like Pakdasht, Malard, Shahre Qods, and southwestern Tehran’s industrial zones have become hotspots for these operations. Inspectors have found mining farms hidden in some creative locations – underground tunnels and factories using subsidized power connections to avoid detection.
Beklou mentioned that specialized inspection teams are now working with law enforcement to dismantle these operations more systematically.
Public Participation in Enforcement
In an interesting move back in August, Iran introduced a bounty program to encourage citizens to report illegal cryptocurrency mining activities. The state-run utility company Tavanir announced that informants would receive 1 million toman (about $24) for every unauthorized mining device they report.
This approach suggests authorities are recognizing they need public help to tackle the scale of the problem. It’s a practical solution, though I wonder how effective it will be in the long run.
According to a June report from CoinLaw, Iran ranks fifth globally in Bitcoin hashrate distribution, contributing 4.2% of the total network’s computing power. The United States leads with a dominant 44%, followed by Kazakhstan at 12%, Russia at 10.5%, and Canada at 9%.
The situation highlights the challenges countries face when trying to regulate cryptocurrency mining, especially when economic incentives like cheap electricity create strong motivations for unauthorized operations. It’s a complex balance between technological advancement, energy management, and regulatory enforcement.
