Iran’s state-owned power distributor company, Tavanir has threatened to take more severe measures to discourage illegal crypto mining. These include higher penalties for those who mine digital currencies using subsidized electricity, and stiffer fines for officials who are involved in the mining.

To prevent cryptocurrency mining from being done outside of the law, Iran Power Generation, Transmission and Distribution Company has taken new, more severe measures. Mostafa Rajabi Masshhadi, spokesperson for the utility, announced that the penalty for illegal activity in this sector has been raised by 400%. He elaborated on the matter in an interview with Financial Tribune (English-language Iranian edition).

The electricity rates for unlicensed crypto miners are four times more than the export rates, which are already higher than the subsidized rates for households.

Mashhadi stated that the first time offenders would be denied access to subsidized electricity, natural gas, and liquid fuels for three months from the moment they are identified. In a statement on the Iranian Ministry of Energy’s website, Mashhadi stated that those who are caught again will be denied access to subsidized energy for a full one year.

The report revealed that crypto mining will be detected in facilities owned by public institutions or state-run organisations. Those responsible will face criminal penalties and their jobs as government officials in the Islamic Republic will be suspended.

The government of Tehran has taken the decision to limit crypto mining. This is similar to last year. They expect the power shortage to rise during hot months when cooling demand increases. Tavanir in June ordered licensed miners to cease operations until the summer ends. The local crypto community had negative reactions to the seasonal ban.

Electricity shortages and frequent blackouts in 2021 were partly due to the increased power consumption for mining — both legal, and illegal. Last May, licensed miners were ordered to close down . After being allowed to resume operation in September, ordered them to unplug their equipment due to the increased heating demand during winter months.

In July 2019, Iran legalized cryptocurrency mining. Numerous companies applied for licenses from the Ministry of Industry since then and began minting coins using the low-cost energy provided by Iranian power stations.

Many Iranians have set-up improvised mining facilities to increase the load on the power generation sector, since electricity is cheaper. These miners have been being pursued by Iranian authorities, and a May report claims that nearly 7000 underground crypto farms were busted.


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Angie Byrd