Authorities blame subsidized electricity and disguised industrial facilities as the driving forces behind Iran’s illegal mining boom.
Massive Illegal Mining Crisis in Iran
Iran’s crypto mining industry is facing a major illegal mining epidemic, with officials estimating that over 95% of the country’s 427,000 active mining rigs are operating without proper authorization.
Akbar Hasan Beklou, CEO of the Tehran Province Electricity Distribution Company, revealed on Sunday that Iran has emerged as the world’s fourth-largest crypto mining hub — largely due to its heavily subsidized power prices. This cheap electricity has turned the nation into what Beklou called a “paradise for illegal miners.”
These unauthorized operations are said to consume over 1,400 megawatts of electricity continuously — enough to strain the national grid and risk large-scale power disruptions across the country.
Illegal Miners Exploit Industrial Subsidies
According to Beklou, many illicit mining farms disguise their activities as legitimate industrial facilities to gain access to low-cost electricity rates. Inspectors have uncovered mining rigs hidden in underground tunnels, warehouses, and factories, often linked to subsidized power lines meant for manufacturing or agriculture.
The surge in such hidden operations has intensified the government’s nationwide crackdown, particularly in Tehran Province, where 104 illegal mining farms have already been shut down and 1,465 mining machines seized. The confiscated hardware represented the power usage of nearly 10,000 homes.
Crackdown and Citizen Bounty Program
Authorities have launched specialized inspection teams in coordination with law enforcement agencies to locate and dismantle unauthorized operations in Pakdasht, Malard, Shahre Qods, and southern Tehran’s industrial zones.
In a bid to expand enforcement, the Iranian government is offering cash bounties to citizens who report illegal miners. The CEO of state utility Tavanir, Mostafa Rajabi Mashhadi, said informants receive 1 million tomans (around $24) for every unauthorized device they report.
Iran’s Global Mining Footprint
Despite the regulatory challenges, Iran remains a key player in global Bitcoin mining, ranking fifth worldwide in Bitcoin hashrate distribution, according to a June report by CoinLaw. The country contributes 4.2% of the total Bitcoin network computing power, behind:
- United States – 44%
- Kazakhstan – 12%
- Russia – 10.5%
- Canada – 9%
Experts warn that without stricter enforcement and reform of energy subsidies, illegal mining will continue draining national resources and destabilizing Iran’s power infrastructure.
Beklou emphasized that unauthorized crypto mining poses a “serious threat to electricity reliability”, adding that the government plans to introduce new monitoring technologies to detect and disable unlicensed mining rigs in real time.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.