Iran is recruiting its intelligence officers to crack down on illegal cryptocurrency miners in the country.
Iran’s Ministry of Intelligence has established committees around the country to locate and seize farms that are mining cryptocurrencies without a license. Iran has been an appealing place for crypto miners because of its subsidized energy prices.
However, due to the large amount of energy needed for mining, the power grid has struggled to cope, says grid operator Tavanir. The operator has had to dim streetlights and cut power to office buildings because of the surging demand. Rising consumption in other sectors and poor hydro generation have also caused a shortfall in electricity supply.
This year, Tavanir doubled the maximum reward for illegal crypto mining tip-offs to 200 million rials ($873). At 7.5 times the minimum monthly wage, this is a significant incentive. Public whistleblowers have been a key source of intelligence in the government’s crackdown on illegal mining.
Iran’s crypto mining environment
Earlier this week, an Iranian Energy Ministry spokesman declared that unauthorized cryptocurrency miners would have to pay a hefty fine if discovered. In addition to the fees, miners will also have to compensate for the damages they cause to the electricity network. According to the spokesman, unauthorized mining of cryptocurrencies creates problems in the electricity supply due to the damage it causes to the local power grid and transformers.
Many companies have started mining in Iran since the Iranian government approved cryptocurrency mining as an industrial activity in 2019. The Ministry of Industry, Mining and Trade issued over 1,000 licenses for authorized cryptocurrency mining units in January 2020.
Due to this increased demand, Iranian power plants have started to see this industry as an opportunity to increase their revenues. Some power companies have proposed to offer their excess electricity exclusively to cryptocurrency miners. The government agreed to the proposal, in order to reduce the pressure on the national grid. However, the power plants will not be able to benefit from government subsidies.
In light of the proposal’s approval, Iran’s Thermal Power Plant Holding Company (TPPH) has already leapt at the prospect. The company will hold a tender, offering the electricity output of three power plants for cryptocurrency mining.