Clampdown on Illegal Cryptomining Continues

EghtesadOnline: Iran Power Generation, Distribution and Transmission Company (Tavanir) shuts almost 50 illegal crypto farms every day as it tries to alleviate the worsening power shortages, the company spokesman said at the weekend.

News ID: ۷۸۶۶۴۷

12 July 2021

"It is indeed regrettable that an increasing number of people are getting involved in illegal cryptomining. In the past two days we shut 71 farms across the country and seized 800 pieces of hardware," Mostafa Rajabi Mashhadi was quoted as saying by IRIB News.

He added that more than 200,000 cryptomining equipment has been confiscated so far that consumed 750 megawatts. "This was equal to the total consumption of five provinces."

As pressure mounts on the power network due to the record-breaking heat the utility has gotten tough with the avaricious and lawless cryptominers.

Mining virtual currency is legal in Iran and miners are allowed to operate under rules approved by the government in July 2019.

While cryptomining is accepted by the government as legal, illegal farms have cropped up with increasing speed using subsidized electricity because they must pay much higher tariffs if they operate with a permit.

In April the Energy Ministry revised cryptomining rules and charges 16,574 rials for one kilowatt-hour of electricity. The rates double during emergencies like when power plants do not receive enough feedstock or the national grid faces problems supplying households.

To cheat the utility many have shifted their cryptomining activities underground, which has become a major challenge  for Tavanir and the government that has  borne the brunt of recent attacks due to the rolling blackouts and water shortages with the mercury rising to 50+ Centigrade in south Iran.

"By closing illegal farms and halting the operation of authorized miners we have managed to save more than 1,000 megawatts of electricity," the power supplier has said.

"Our estimations show that more than 1,000 MW of subsidized power is still used by the illegal miners, which is almost 4% of the country's total power demand," Rajabi Mashhadi said.

The high electricity consumption of cryptominers is not the only problem. They also damage the power distribution systems, which has recently led to outages with more rolling blackouts expected in the coming weeks as the summer season reaches its peak.

Illegal miners have reportedly caused 180 trillion rials in damage to the national grid and power distribution equipment.

President Hassan Rouhani last month ordered a ban on all cryptomining units until the end of summer to lessen the pressure on the national grid.

The Ministry of Industries, Mining and Trade has issued license for 30 cryptomining units, according to the figures published on ministry website. It also has given 579 establishment permits.

There is a plethora of reports about cryptomining in residential units and in farms in Iran but no authentic official data is available.

Tavanir has warned household miners asking them to switch off. "Failing to comply their equipment will be confiscated and their electricity will be cut." The major utility seized 87 pieces of equipment from residential housing units in Tehran alone last week.

It was also announced earlier that Illegal miners who apply for a license from the Ministry of Industries in the next four months will be eligible for tariff discount.