Authorities in Iran have shut down more than 1,000 illegal Bitcoin miners operating in the region, with whistleblowers rewarded with $2,400 each for their efforts.
Closed 1,100 Illegal Miners
Tavanir, the Power Generation, Distribution, and Transmission Company in Iran, has shut down more than 1,000 illegal Bitcoin mining farms operating in Iran, according to local media sources. The report added that the whistleblowers had tipped the company off illegal bitcoin mining rigs after a reward announcement had been issued in July. The authorities have promised a reward of 100 million rials (about $2,400) to people who provide information on illegal crypto mining in the country.
The deputy head of Tavanir, Mostafa Rajabi Mashhadi, told media outlets that the blitz of illegal cryptocurrency mining in Iran was restricted. The power company could not detect all illegal farms by looking solely at their patterns of power consumption.
Cryptocurrences in Iran
Iran has become one of the top destinations for Bitcoin miners because of the cheap power they deliver. In July last year, Bitcoin miners in Iran welcomed the authorization as they thought it meant that crypto mining was finally legal in the Middle East. However, some miners began complaining about high power tariffs, causing some of them to operate underground using subsidized electricity.
Rajabi Mashhadi pointed out that some of the country’s miners have set up mining rigs at industrial and agricultural outlets that already consume high electricity. This made it possible for them to work and avoid detection. Mashhadi added that the Tavanir monitoring did not show any major change in consumption in these cases due to this illegal activity.
Iran remains the third-largest oil producer globally, but it has been battling the smuggling of mining equipment into the area. After the approval of Bitcoin mining last year, Iran has given 624 mining permits, the local media outlet added. However, some of the licensed farms are either in operation or are currently in idle condition. In July 2020, Iran’s Vice President Eshaq Jahangiri Kouhshahi stated that all BTC miners would soon be forced to register their rigs with the government.
Iran’s greatest draw for miners is the country’s cheap electricity tariff. This has drawn miners from different parts of the world, including Ukraine and China, to Bitcoin. According to official statistics, Iranian mining companies pay approximately 4,800 rials ($0.01) per kilowatt-hour (kWh) of electricity. However, the rates typically increase four-fold to 19,300 rials ($0.05) during the peak summer season, which is about June to September.
Earlier reports revealed that the state power utility announced last month that it would reduce roughly 47% of the electricity tariff that it charges miners during peak consumption periods. This is an effort to incentivize legal mining and encourage more foreign investors to set up Bitcoin mining farms in the country. However, interestingly, before miners can be eligible for the incentive, they will need to take part in Tavanir’s “power efficiency projects,” including the ongoing replacement of over a million old air conditioners.
The Iranian government has been paying attention to Bitcoin for economic and political reasons. Their desire to be financially free from the U.S government’s outreach is one of the critical drivers for Bitcoin’s attraction in Iran.