Illegal crypto miners in Iran to face stricter penalties

• The government has warned illegal miners of heavier penalties to come
• Illicit mining of crypto affects the power availability for household and industrial use

Iran is cracking the whip harder as it contends with the fact that unauthorised mining is setting a strain on the country’s energy supply. The government is set to impose legislation containing heavier punishment for those caught mining crypto assets illegally. 

Hitting the dodgy miners hard

According to a report published by the Tehran Times on Saturday, the move is meant to avoid blackouts and punish those using subsidised electricity for illegal crypto mining operations. Fines could rise threefold, and jail time increased by up to five times. An official with the country’s Power Generation, Distribution, and Transmission Company (known as Tavanir) sounded the warning.

 “Any use of subsidised electricity, intended for households, industrial, agricultural, and commercial subscribers, for mining cryptocurrency is prohibited,” said Mohammad Khodadadi Bohlouli.

Bohlouli added that misuse of the subsidised electricity by cryptocurrencies affects the quality of electricity, which in some cases, results in the damage of user electrical appliances. That adds to the fact that Iran’s infrastructure is somewhat dilapidated after years of economic sanctions.

The announcement comes on the back of a recent ban on cryptocurrency mining – in 2021 to free up electricity for industrial and household use amid a series of blackouts. The ban, which lasted until March 6 this year, was to free up 209 megawatts of power for consumption.

It is not the first time that the Iranian government has proposed taking harsher action against the misuse of energy resources. Back in May 2021, Mostafa Rajabi Mashhadi, Iran’s Energy Ministry’s spokesperson for the electricity sector, stated that such miners ought to compensate for damages and addition to their subjection to heavy fines.

The crypto scene and Iran’s infrastructural crisis

An estimated 4.5% of Bitcoin mining takes place in Iran, which blockchain tracking platform Elliptic says has allowed Iran to bypass the weighty sanctions it suffers each day.

Despite that, Iran has had an increased desire to switch to green energy and move away from its reliance on oil and natural gas. It has embarked on constructing renewable energy plants to serve a huge chunk of the population in urban areas. However, miners, who consume huge amounts of electricity meant for households, have disrupted any progress.

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