Around 7,000 cryptocurrency mining machines were seized by Iranian officials last June 22 in an abandoned warehouse just outside the capital city of Tehran.
According to the chief of police in Tehran, Rossein Rahimi, the machines were found in an illegal mining farm located west of Tehran. It is considered the largest apprehension to date. This also comes just a few weeks after officials seized around 3,000 crypto mining equipment earlier in the month.
Cryptocurrency mining is regulated in Iran provided that miners acquire a license to operate. However, the government has attested that many crypto miners operate illegally, resulting in unregulated power consumption that affected the electricity supply of Tehran and other neighbouring cities.
Iran has been suffering from intermittent power outages during the summer, and the government is blaming it on the operations of illegal crypto miners. Cryptocurrency mining activity has caused the country’s already weak power grids to shut down, causing complaints and a higher demand for electricity, especially during the summer.
According to analytics firm Elliptic, cryptocurrency mining in Iran is said to provide 4.5% of Bitcoin’s overall supply. This means that illegal crypto miners in the country get thousands and even millions of dollars worth of Bitcoin for their work.
In May of 2021, the Iranian government implemented regulations to ban crypto mining temporarily. It was made effective immediately within the same month and must be followed until the end of September 2021. This will void the legitimacy of all mining licenses until the ban is lifted.
However, despite these efforts to temporarily ban mining for the next few months, illegal miners continue to operate underground.
Mining Bitcoin and other cryptocurrencies is notorious for high energy consumption. The process makes use of mining equipment to solve complex mathematical problems to record cryptocurrency transactions wherein miners are given digital assets as incentives. However, this demands massive amounts of electricity, making countries such as Iran that have cheaper electricity costs ideal hubs for crypto mining companies and miners.
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