Iran shuts down 1,600+ illegal mining farms in 18 months: report

Getting your Trinity Audio player ready...

Iranian authorities have shut down over 1,600 block reward mining farms in the past 18 months, a new report has revealed. The shutdowns started when Iran recognized mining as a legitimate industry, surging in December 2020 when most digital currencies recorded huge price spikes.

The report by local newspaper Financial Tribune indicates that the 1620 illegal farms were using 250 megawatts of electricity. For most, their crime was using the subsidized electricity that Iran provides for domestic use.

Speaking to the state broadcaster, a spokesperson for the Power Generation, Distribution and Transmission Company (Tavanir) reiterated that the company will keep on cracking down on these illegal farms. He stated:

“Tavanir is strict in dealing with unauthorized miners, those who use subsidized power, such as unlicensed miners, will be fined as much as the loss they impose on the national grid. Their mining places will be disconnected from the national grid and face prosecution.”

Iran first recognized block reward mining in July 2019. Miners had to obtain the proper authorization from the government to conduct operations. In legalizing the industry, the Iranian government hoped it could boost the economy and raise more taxes.

Block reward miners initially welcomed the move. However, according to the Financial Tribune report, this changed quickly after miners realized how high the electricity tariffs for miners were. To evade these tariffs, they went underground with their operations. Power companies, together with authorities, have been hunting them down since then.

Tavanir, whose power most of the miners have been stealing, is authorized to shut down such illegal operations, the report notes.

Iran’s Energy Ministry bases the power tariffs for miners on the average power export rates. As per the report, these rates are highest in the summer, where they are double the export rate. It stated:

“Miners are charged 4,800 rials ($0.11) for one kilowatt-hour that is half the electricity export rate in autumn, winter and spring. However, billings are planned to be based on 19,300 rials/kw, twice the price for exported electricity in summer (June to Sept).”

While the 1,620 farms have been shut down since the industry became legal, the Iranian government’s crackdown on miners predates the July 2019 rule. A month before legalizing mining, the government seized 1,000 block reward mining rigs over alleged high power use.

See also: TAAL’s Jerry Chan’s presentation at CoinGeek Live, The Shift from Bitcoin “Miners” to “Transaction Processors”