Iran Authorises 30 Mining Facilities Following Mass Seizure of Mining Rigs

June 28, 2021, 7:00 AM AEST - 3 months ago

Last week, Iranian authorities seized 7000 mining rigs located in the vicinity of capital city Tehran, citing unauthorised energy consumption and illegal operations.

Now, Iran seems to be clarifying that it does not want to follow China’s lead and ban crypto mining altogether – rather, the Iranian government wants to ensure crypto miners abide by the rules and do not cause undue stress to the power grid.

Limiting Consumption During Peak Hours

The abundance of crypto mining farms in Iran – and their associated intensive use of the power grid – is the result of financial sanctions imposed on the country by the US. Since Iran is forbidden from using US dollars and partially restricted from using SWIFT, the government has looked to cryptocurrencies for alternative payment methods.

In order to help local entrepreneurs find their footing, miners were offered a discount of nearly 50% on their electricity bills if they could prove the power was being used for crypto mining.

However, it appears this measure was a little too successful.

Energy Utility Threatens Shutdowns

Government research has revealed authorised crypto mining farms in Iran consume around 300 megawatts each day. However, according to Tavanir – the company that operates Iran’s power grid – illegal mining operations consume an additional 2000 megawatts a day. As a result, Tavanir has announced it will cut off power to mining facilities when the power grid is under stress.

Following crackdowns on illegal operations, 30 mining facilities have been authorised by the government as of June 27. Six of these are in Semnan province. Alborz, Zanjan, Mazandaran and East Azerbaijan provinces are also home to mining operations.

Tehran is home to one newly licensed crypto mining operation – in stark contrast to more than 180 unauthorised operations in the capital region that have been shut down during the past year.

Iran is not the only country to crack down on unauthorised mining. China – a close economic partner of Iran – has also recently called a halt.

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