Iranian authorities have reportedly seized tens of thousands of Bitcoin (BTC) mining rigs. They were allegedly used with illegally obtained electricity from a state-owned company and operated without a license.
Bitcoin mining in Iran
The local news medium Tasmin News Agency reported the news yesterday. There are reportedly 45,000 miners, also known as ASICs which stands for Application-Specific Integrated Circuit. They were roaring with electricity from energy supplier Tavanir.
According to Mohammad Hassan Motavalizadeh, the head of Tavanir, the rigs were using 95 megawatts of electricity per hour at a reduced rate.
So this was not tapped energy. Yet it was an illegal activity, and that requires some explanation.
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Iran has been proactively promoting the Bitcoin mining industry for over two years. President Hassan Rouhani has ordered some authorities to draft laws and regulations for the booming Bitcoin industry.
As a result, anyone who wants to mine in Iran must obtain a license. On average, they will pay a small premium on the electricity they use. In addition, the Bitcoin they earn has to be sold to the state.
According to market research, 1,000 such licences were already issued in the period July 2019 to January 2020. Now a year later, that number has undoubtedly gone way up.
But there are still companies that are trying to do it without a licence. Last month, we reported that Iran had already closed 1,620 illegal mining sites. Together they would have been good for 150 megawatts of electricity during 18 months.
In August 2020, the same Tavanir announced that they had shut down 1,100 illegal Bitcoin mining farms in the country. Iran says they are imposing these strict rules because the country is experiencing blackouts due to these mining giants.
Authorities say another licensed farm, with a total consumption of 600 MWh, has been shut down to prevent further outages.
Bitcoin proponent Ziya Sadr says this is false. Miners, he says, have „nothing to do with the power outage“ and it is only a „very small“ percentage of the total electricity capacity in the country.
Meanwhile, the hunt for unlicensed miners continues. What happens to the rigs is not known.
Perhaps they can take inspiration from Venezuela. The country has implemented similar legislation, and here the army is building new mining farms from this confiscated equipment.