Illegal Crypto Mining Crisis Drains 1,400 Megawatts From Iranian Power Grid Daily
Iran faces a widespread illegal cryptocurrency mining crisis. According to Cointelegraph, authorities estimate that over 95 percent of the country's 427,000 active mining devices operate without authorization. Akbar Hasan Beklou, CEO of the Tehran Province Electricity Distribution Company, made this announcement on Sunday.
Beklou said Iran has become the world's fourth-largest crypto mining hub. The country's heavily subsidized electricity prices have created what he called a "paradise for illegal miners." These unlicensed operations consume more than 1,400 megawatts of power around the clock. Most illicit miners disguise their activities as industrial facilities to access cheaper power rates.
Authorities have intensified enforcement actions across the country. In Tehran Province alone, officials shut down 104 unauthorized mining farms. They seized 1,465 machines, which together consumed electricity equivalent to nearly 10,000 households. The government identified several hotspots for illicit mining, including Pakdasht, Malard, Shahre Qods and southwestern Tehran's industrial zones. Inspectors uncovered farms hidden in underground tunnels and factories using subsidized power connections to evade detection.
Power Grid Strain Threatens National Stability
The illegal mining operations place immense pressure on Iran's national grid. Iran International reported that cryptocurrency mining accounts for 15 to 20 percent of Iran's electricity imbalance. Mohammad Allahdad, deputy director of Iran's power company Tavanir, said mining operations consume nearly 2,000 megawatts of electricity. This amount equals the output of two Bushehr nuclear reactors.
During a recent internet outage linked to the conflict with Israel, power consumption nationwide dropped by 2,400 megawatts. Tavanir attributed this drop to the shutdown of over 900,000 crypto mining devices operating illegally. This data further validated the scale of unauthorized mining's impact on the grid. While mining represents only 5 percent of total electricity consumption, it accounts for up to 20 percent of the current power deficit.
Iran offers cash rewards to citizens who report illegal operations. In August, the country announced that informants will receive 1 million toman, about $24, for every unauthorized mining device reported. Tavanir has seized over 240,000 mining devices since last year. Allahdad warned that illegal mining during peak hours can lead to voltage drops, equipment damage, and even fires caused by the heat generated by the machines.
Global Trend of Mining Regulation Intensifies
Iran's crackdown reflects a broader global pattern of governments tightening controls over cryptocurrency mining. Countries worldwide grapple with balancing the economic benefits of mining against energy consumption concerns. We reported that governments increasingly implement regulatory frameworks to manage crypto mining activities, with varying approaches to legal status, tax treatment, and innovation support.
According to a June report by CoinLaw, Iran ranks fifth globally in Bitcoin hashrate distribution. The country contributes 4.2 percent of the total network's computing power. The United States leads with a dominant 44 percent share, followed by Kazakhstan at 12 percent, Russia at 10.5 percent, and Canada at 9 percent. Iran's position as a major mining hub stems largely from its energy subsidies, which keep electricity prices among the lowest worldwide.
The enforcement challenges Iran faces mirror those seen in other mining hotspots. Miners often operate in hard-to-detect locations and use industrial power connections to avoid scrutiny. The Iranian government's decision to engage citizens in enforcement through financial incentives represents a new approach to addressing the problem. Whether this strategy proves effective remains to be seen as the country continues to struggle with power shortages that affect millions of citizens.
Iran's experience demonstrates how unregulated mining can strain national infrastructure. As more countries develop their cryptocurrency policies, Iran's aggressive enforcement measures may serve as either a cautionary tale or a blueprint for other nations facing similar challenges with illegal mining operations.
