Since Iran began recognizing cryptocurrency mining as an industry, it has reportedly shut down 1,620 unauthorized crypto mining companies. Crypto miners initially welcomed the recognition but later said electricity rates were too high.

1,620 Crypto Mining Companies in Iran Shut Down

Iranian authorities have reportedly shut down 1,620 illegal cryptocurrency mining companies since the country began recognizing cryptocurrency mining as a legal industry in July 2019. The Financial Tribune reported on Monday that these mining companies were using 250 megawatts of electricity. Many of the unauthorized cryptocurrency mining companies were identified in December as having surpassed bitcoin’s price all-time highs.

Mostafa Rajabi Mashhadi, a spokesman for the Power Generation, Distribution and Transmission Company (Tavanir), told the state broadcaster on Saturday:

Tavanir is strict with unauthorized miners, those who use subsidized power, such as unlicensed miners, are fined as much as the loss they cause on the national grid. Their mining sites will be disconnected from the national grid and prosecuted.

In July 2019, the Iranian government said it would recognize crypto mining as a legal industry. The publication noted that the miners initially welcomed this move, but later claimed that electricity tariffs were too high and took their business underground.

Tavanir is legally authorized to shut down illegal crypto mining companies, the news center noted, adding that a total of 24 cryptocurrency mining companies using 310MW have been approved by the Ministry of Industry, Mining and Commerce to date.

The Iranian Ministry of Energy explained that miners’ electricity bills are based on the country’s average energy export rates and Forex Management Integrated System (Nima). “Miners pay 4,800 rials for one kilowatt hour, which is half the rate of electricity export in the fall, winter and spring,” the publication said. “However, billing is planned at 19,300 rials / kw, twice the price for electricity exported in summer (June to Sept).”

Rajabi Mashhadi said the judiciary reported a leap in lawsuits related to illegal cryptocurrency mining in December, and nearly 500 cryptocurrency mining companies were identified with the help of whistleblowers. They are given incentives, including rewards of 100 million rials, to help energy officials identify illegal crypto mining companies.

What do you think about crypto mining in Iran? Let us know in the comments below.

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