Two crypto mines in Iran closed down due to power spike

A report by RadioFreeEurope reveals that almost 1,000 bitcoin mining machines were seized by Iranian authorities from two abandoned factories. Two crypto mines in Iran closed down due to power spike. Global X change.

A spokesman for the Energy Ministry said cryptocurrency mining operations were destabilizing the power grid. Also, affecting electrical access for households and businesses, after the June 27th action. The government will continue to pursue mining operations. He cautioned about proliferated in recent years.

Globalexchange. According to the minister, electrical consumption in the country has spiked 7 percent. To put the spike in perspective, he explained that the power used for mining one coin equaled the energy used by 24 residential units for an entire year!

Two crypto mines in Iran closed down due to power spike. The cost of running a crypto mining farm is inexpensive because electricity is heavily subsidized in Iran. It is can be as low as $0.006 per kilowatt-hour. Even though the practice is illegal, was previously reported that Tehran-based crypto startup, Areatak, was hunting for foreign capital to establish crypto mining sites across Iran. Globalexchange.

Bucking their home country’s image as a crypto mining hub, Chinese firms, too, have set up facilities in Iran.

Global X change. The Iranian Energy Ministry proposed setting a special price for the power used by crypto miners. The spokesman suggested in his speech that some crypto miners may be locating their power-hungry rigs in schools and mosques to avoid paying utility bills.

Safe haven?

Reportedly a devaluation of Iran’s national currency and a shrinking economy have spurred citizens to seek refuge in cryptocurrencies.

Mohammad Shargi, head of Iran’s Bitcoin Society, was quoted as saying by IRNA in June:

“Mining these currencies inside Iran will not only prevent money from leaving the country, it will also create currency under the difficult conditions of sanctions.”

Global exchange. Iran withdrew from the 2015 nuclear deal last May. This caused the US to impose strict sanctions. Shargi suggested crypto used by Iranians may be a means to bypass and subvert these sanctions.

A draft framework on the legality of cryptocurrency was published earlier this year by the Central Bank of Iran. It had previously placed capital flight controls on cryptos. Globalexchange.