Illegal crypto mining not the cause of Iran’s electricity shortages, ministry says

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Iran’s Ministry of Industry, Mines and Trade has reportedly dismissed claims by the main electricity company Tavanir that accused illegal cryptocurrency miners of being responsible for the country’s ongoing power shortages.

According to a report by the Financial Tribune, Alireza Hadi, the ministry’s director of investment and planning, said the figures Tavanir announced appeared to be grossly exaggerated. Hadi questioned Tavanirs’ claims that illegal mining activities consume 2,000 megawatts of electricity. This amount would be equivalent to the power used by 3 million pieces of equipment, he said.

While cryptocurrency mining has been legalized by the Iranian government, Tavanir blames unregistered miners for nationwide electricity shortages. In August 2021, Tavanir Rajabi Mashhadi’s spokesperson said:

Unauthorized minors are the main culprits of the power outages of recent months. We would have had 80% fewer outages if the miners had gone out of business.

Tavanir also claims to have closed the operations of more than 5,000 mining farms in addition to the confiscation of 213,000 unauthorized mining equipment capable of consuming 850 megawatts.

To date, Iran’s Ministry of Industry, Mines and Trade has authorized 56 mining farms that collectively consume 400 megawatts, according to Tanavirs’ estimate. In 2020, the ministry authorized and registered 126,000 mining equipment, which consumed 195 megawatts when operating at full capacity.

Related: Iranian Government Removes Over 1,000 Cryptocurrency Mining Farms

Last year, whistleblowers helped Tavanir shut down 1,100 crypto mining farms that apparently did not have the proper licenses.

Iranian citizens who help authorities track down illegal minors received 100 million rials ($ 480) as a bounty. Although Iran approved registered companies to conduct mining operations, authorities had warned crypto miners to register their businesses and equipment before the end of 2020.

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