Iran Authorities Seize 1,000 Bitcoin Mining Machines

News | July 1, 2019 By:

Iranian authorities have confiscated about 1,000 bitcoin mining machines from two abandoned factories.

Reuters reported tha local authorities blamed an “unusual” spike in electricity consumption in the country on cryptocurrency miners. Iranian Energy Ministry spokesperson Mostafa Rajabi said that confiscated bitcoin mining machines were mostly to blame for a 7% increase in power consumption in the month of June.

“Increased digital-currency mining within the country had made the power grid unstable and caused problems for consumers,” Rajabi said, noting that the power for mining each bitcoin equaled the power used by 24 residential units for an entire year.

Cryptocurrency mining is increasing in Iran due to the relatively low electricity costs in the country – as low as $0.006 per kilowatt-hour. Last fall, government officials acknowledged crypto mining as an official industry, which fueled a sharp increase in the number of Iranian crypto miners.

Media reports have suggested that the US sanctions that severely restrict financial and banking transfers in Iran are among the main reasons why some locals have been turning to cryptocurrencies.

“Everyone’s talking about bitcoin and how to get it,” Mahsa Alimardani, a researcher at the Oxford Internet Institute, who grew up in Iran, told BBC. “With US sanctions over its nuclear program hitting Iran financially, Iranians often discuss via social media the question of how wealth can be stored securely. Gold and US dollars are long-standing popular suggestions. Bitcoin and [other cryptocurrencies] are slowly coming up as the third alternative.”

Rajabi warned that they will continue to crack down mining operations in the country, and will look at a way to charge crypto miners at a special price.