Iran’s Cryptocurrency Mining Rig Seizures

Iranian authorities have confirmed the seizure of approximately 240,000 cryptocurrency mining rigs over the past three years, as reported by the state electricity company Tavanir on Sunday. Tavanir expressed concerns about the country’s electricity situation.

Power Shortages and Mining Impact

Iran has faced severe power shortages and network instability in recent months, raising alarm among officials. CEO of Tavanir, Mostafa Rajabi Mashhadi, stated that the confiscated rigs consumed around 800 megawatts of electricity, comparable to the 1,000 megawatts capacity of the Bushehr nuclear power plant. Mining activities have put significant strain on the national grid amid an ongoing energy crisis.

Despite being a major supplier of natural gas and crude oil, Iran has grappled with energy shortages. In December, power rationing was implemented, reducing operational hours for government offices and forcing schools to switch to online activities. Many areas experienced blackouts due to worsening energy issues.

Illegal Mining Activities

Mashhadi noted the ongoing problem of illegal electricity usage, prompting him to appeal for assistance from the Economic Security Police to identify illegal miners. Under Iranian law, possession of unregistered mining equipment leads to confiscation and hefty fines. Estimates suggest around 700,000 illegal miners are still operational, consuming at least 2,000 megawatts amidst rising temperatures and industrial demand.

Regulatory Environment for Cryptocurrencies

While Iran continues its seizure operations, the country has a complex relationship with cryptocurrencies. The Central Bank of Iran (CBI) has forbidden the exchange of fiat currency for crypto and barred the payment network Shaparak from facilitating such services to counter the currency’s decline. Recent measures have restricted access to crypto services for about one million Iranians.

Nevertheless, the CBI is attempting to regulate the cryptocurrency space, releasing a report in December 2024 titled ‘Policy and Regulatory Framework for Cryptocurrencies’. This framework includes provisions requiring trading platforms to share private trader information with the government. Although met with resistance from the Iran Fintech Association, the future actions regarding digital assets remain uncertain.