Iranian Power Utility To Take Severe Measures Against Illegal Crypto Miners

Tavanir, the state-owned power distribution company in Iran, recently threatened to take severe measures against those who are engaging in crypto mining illegally. These include imposing penalties on government officials who are involved in these activities and higher fines on those using subsidized electricity for minting digital currencies.

More fines for illegal crypto mining

The Iranian power utility firm Tavanir has said that in order to prevent illegal crypto mining activities in the country, it would adopt new and harsher measures against perpetrators. Mostafa Rajabi Mashhadi, a spokesman for the utility said that there had been a 400% increase in the fines for illegal crypto mining activities.

He stated that four times higher rates would be charged for electricity from unlicensed crypto miners. These rates would not be applicable on the subsidized ones charged from households, but on export rates that are high already. The spokesman detailed that subsidized energy would not be accessible to first-time offenders for three months after their identification, including access to natural gas, electricity as well as liquid fuels.

The official further added that if the same offenders are caught again, their supply would be cut off for about a year. If unlicensed crypto mining activities are discovered at public institutions or state-run organizations, then those who are behind it would have to face heavy penalties in accordance with the law and would also face suspension from their jobs.

Government crackdown

This government crackdown against crypto mining is quite similar to what they had done last year. During the hot summer months, there is a greater consumption of electricity due to cooling and this has pushed the government in Tehran to take these measures. Licensed miners were ordered by Tavanir to shut down their operations in the country by the end of this summer last month.

The local crypto community reacted negatively to the seasonal ban. There had been frequent blackouts and electricity shortages in Iran last year and they had partially been blamed on illegal and legal crypto mining activities that consume a lot of power. Last May, the government ordered licensed miners to halt their operations.

They had been permitted to start once more in September, but the higher demand for heating in the cold winter months had seen them close once more.

Legalization of crypto mining

In July 2019, Iran declared crypto mining to be a legal activity. Once it did so, the Ministry of Industry received license applications from dozens of companies and they began to utilize the low-cost energy supplied by power plants in Iran to mint digital coins.

However, since electricity is sold at much cheaper rates to households, many people have set up mining operations at home and this has increased the workload for Tavanir. The authorities in the country have been going after these illegal operations since then. Back in May, a report disclosed that approximately 7,000 such illegal crypto farms have been shut down so far by the Iranian authorities.