Digital Assets: Iran Cracks Down On Illegal Crypto Miners
The miners were allegedly using subsidized Government electricity.
Iran, which is facing severe energy shortages during the cold months, has been forced to implement rolling power cuts across the nation. In these circumstances, in a sudden action, police seized 45,000 bitcoin mining rigs on the charge of illegally drawing and consuming subsidized power. (Tasnim News Agency)
Separately, the country’s Energy Ministry has temporarily cut the supply of 600MW of power to all authorized BTC miners in the country. Instead, it has redirected the energy to household use.
BTC miners using power cheaply
According to Mohammad Hassan Motavalizadeh, head of Iran’s state-run electricity company Tavanir, the outfits using the confiscated mining rigs were using as much as 95 megawatts per hour (MWh) of electricity at extremely low prices.
By making modifications to street lighting systems in various Iranian cities, the aggregate power saved is equivalent to “the (electricity) use for a city with a population of over half a million,” said Motavalizadeh.
The Energy Ministry was also forced to take action against a cryptocurrency mining farm owned by a Chinese-Iranian investment company. Located in southeastern Iran, the farm was featured in a video that showed tens of thousands of mining rigs operating to create cryptocurrencies. The Ministry cut off the power supply to the farm after the video went viral on social media. It had reportedly been using as much as 175 megawatt-hours (MWh) of electricity.
Oil-fueled electricity is very cheap in Iran due to subsidies and vast oil reserves. It costs less than 1 cent per kWh. As a result, crypto mining has become a lucrative activity in the country. So much so that it produced 8% of all the world’s bitcoin production.
With bitcoin’s price zooming higher in recent weeks, miners are operating their rigs flat out. The resultant load on the grid has caused severe supply dislocations.
According to Arab News, Teheran is offering a reward of $4,750 to informants who can pinpoint illegal and clandestine crypto mining operations.
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