(MENAFN- Crypto Breaking) Iran's burgeoning crypto mining industry faces escalating challenges as authorities combat a widespread illegal mining crisis. Despite efforts to regulate the sector, an estimated 95% of the country's 427,000 active mining devices are believed to operate without authorization, posing risks to national energy stability and regulatory efforts. Amid these developments, Iran is taking measures to curb illicit operations while incentivizing whistleblowers to report violations, reflecting the country's ongoing struggle to balance the growth of cryptocurrency activities with regulatory oversight.

• Over 95% of Iran's active mining devices are unauthorized, significantly straining the country's power grid.
• Authorities have shut down 104 illegal mining farms in Tehran Province, seizing nearly 1,500 machines.
• Iran is offering financial rewards for citizens reporting illegal mining activities to enforce regulations.
• Iran ranks as the world's fourth-largest crypto mining hub, with a substantial contribution to Bitcoin 's global network hash rate.

Iran's crypto mining sector has become a prominent player on the global stage, with the country ranking as the fourth-largest hub for cryptocurrency mining. This growth has been largely driven by the subsidized electricity prices, which have made Iran an attractive destination for miners seeking low-cost energy sources. However, this affordability has also fostered a significant underground industry, with authorities estimating that most illegal operations consume more than 1,400 megawatts of power daily, putting considerable pressure on the national electricity infrastructure.

Akbar Hasan Beklou, CEO of the Tehran Province Electricity Distribution Company, highlighted that many illicit miners disguise their operations as industrial plants to access cheaper electricity. This clandestine activity not only hampers the country's energy stability but also complicates efforts to enforce regulatory compliance.

Iran's cheap cost of mining Bitcoin. Source: Bitcoin ArchiveIran Shuts Down 104 Illegal Mining Farms

In an increased crackdown, Iranian authorities have dismantled 104 illegal mining operations in Tehran Province alone, seizing approximately 1,465 mining machines. These illicit farms are responsible for electricity consumption equivalent to that of nearly 10,000 households. Authorities have pinpointed hotspots including Pakdasht, Malard, Shahre Qods, and industrial zones in southwestern Tehran. Many of these clandestine facilities are concealed within underground tunnels and factories, using subsidized electricity to evade law enforcement detection.

Specialized inspection teams are actively working with law enforcement agencies to dismantle these illegal operations and mitigate their impact on the national power grid. The ongoing efforts underscore Iran's commitment to tightening regulations around the crypto mining industry amid growing concerns over unregulated activities.

Related: Afghanistan internet blackout 'a wake-up call' for blockchain decentralization

Incentives for Reporting Illegal Miners

To strengthen enforcement, Iran introduced a program offering cash rewards to citizens who report illegal mining operations. Since August, informants have been eligible to receive 1 million toman (roughly $24) for each unauthorized mining device they identify. This initiative is aimed at curbing illicit activities by encouraging grassroots involvement in enforcing mining regulations.

According to a June report by CoinLaw, Iran ranks fifth globally in Bitcoin hashrate distribution, contributing approximately 4.2% of the world's total computational power. The United States maintains dominance with a 44% share, followed by Kazakhstan (12%), Russia (10.5%), and Canada (9%).

Iran ranks fifth globally in Bitcoin hashrate distribution. Source: CoinLaw

As Iran continues to leverage its abundant energy resources for crypto mining, these efforts highlight the ongoing tension between the industry's rapid growth and regulatory measures aimed at preventing illegal activity and protecting national infrastructure. The country's strategies to incentivize whistleblowing and crackdown on illicit mining reflect a broader global challenge faced by regulatory authorities trying to balance crypto market expansion with security and sustainability concerns.

Crypto Investing Risk Warning
Crypto assets are highly volatile. Your capital is at risk. Don't invest unless you're prepared to lose all the money you invest.

MENAFN02112025008006017065ID1110282366