Since its launch in 2009, Bitcoin and other cryptocurrencies have caused controversy. The majority of nations throughout the world are working to establish rules and legislation controlling cryptocurrencies. While the Iranian government allows licensed cryptocurrency mining, authorities cracked down on unauthorized mining last year to relieve demand on the country’s energy supply. The Iranian government plans to implement new regulations that will increase the sanctions for illegal crypto mining
Iran Strikes Back Against Illegal Crypto Miners
According to a senior official with the country’s Power Generation, Distribution, and Transmission Company (Tavanir), the Islamic republic’s new legislation will include jailing violators and revoking business licenses.
According to the Tehran Times, which cites the state-run news agency IRNA, Mohammad Khodadadi Bohlouli, the additional punishments include increasing fines by a minimum of three and a maximum of five times, imprisoning the offender, and cancelling their business license in the case of repeat violations. The official said that abusing subsidized electricity to mine cryptocurrencies degrades the quality of the national grid’s electricity supply and destroys people’s electrical appliances such as televisions, refrigerators, and air conditioners.
“It is unlawful to mine cryptocurrency using subsidized electricity intended for homes, industrial, agricultural, and commercial subscribers,”
Khodadadi
Crypto Mines Causing Power Shortages
Iran banned cryptocurrency mining for nearly four months in late May last year as part of efforts to reduce the frequency of power outages, which officials blame on growing electrical consumption during the hot and dry summer. According to the IRNA, Tehran police commander, Gen. Hossein Rahimi reported that the 7,000 computer miners were apprehended in an abandoned facility west of Tehran.
Bitcoin and other cryptocurrencies are created through a process known as mining, in which strong computer clusters compete to solve complex mathematical challenges. The process is extremely energy-intensive, frequently demanding the use of electricity generated from fossil fuels, which are abundant in Iran.
In 2019, the Iranian government legalized bitcoin mining for industrial uses only. This decision triggered a mining boom across the country. Later in 2020, the government provided over 1,000 bitcoin mining machines.
In its study, blockchain analytics firm Elliptic said Iran accounts for approximately 4.5% of all bitcoin mining, generating hundreds of millions of dollars in cryptocurrency revenue that can be utilized to mitigate the impact of US sanctions.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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