Iran is set to introduce increased penalties for illegal crypto miners that use subsidized electricity, a local media outlet reported on Saturday. Under the new regulations, offenders will be handed increased fines, 3-5 year jail term, and the revocation of their business licenses.
“Any use of subsidized electricity, intended for households, industrial, agricultural and commercial subscribers, for mining cryptocurrency is prohibited,” an official with Iran’s Power Generation, Distribution, and Transmission Company, Mohammad Khodadadi Bohlouli, said.
The official added that crypto miners who use subsidized electricity illegally decrease the country’s power grid and destroy people’s electrical appliances such as televisions, refrigerators, air conditioners and more.
Iran struggles to curtail illegal crypto mining
Thanks to its low-cost energy, Iran has quickly become one of the largest crypto mining hubs in the world. According to a report by blockchain analytics firm, Elliptic, 4.5% of crypto mining operations between January and April 2021 took place in Iran which places the country among top 10 mining sites in the world.
Cryptocurrency mining has been legalized in Iran since 2019. At the same time, the country has clearly shown disapproval for illegal operations, especially those where operators are not authorized by state or energy distribution companies.
In January 2021, Iranian police confiscated about 45,000 crypto mining machines that were using subsidized electricity illegally. Five months later, authorities also seized 7,000 machines linked to illegal crypto mining operations.
The Iranian government estimates that 85% of crypto mining activities in Iran are illegal. Unauthorized mining firms are said to consume up to 3000 MW of power daily, a rate that poses a threat to the electricity grid.
Hence, the tougher penalties being proposed in the recent development are designed to disincentivize these bad actors and promote healthy energy usage, all of these while giving Iranian authorities full control of the local mining industry.
