Illegal crypto mining not cause of power shortages in Iran, ministry says

Iran’s Ministry of Industry, Mine and Trade reportedly dismissed claims by leading power company Tavanir that blamed illegal cryptocurrency miners for the ongoing power shortages in the country.

According to a report by the Financial Tribune, Alireza Hadi, the ministry’s director of investment and planning, said that the figures announced by Tavanir “seem to be highly exaggerated.” Hadi questioned Tavanir’s claims that illegal mining activities consume 2,000 megawatts of power. “This amount would equal power used by 3 million pieces of hardware,” he said.

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

“Unauthorized miners are the main culprits behind the power outages in recent months. We would have had 80% less blackouts if miners had halted their activities.”

Tavanir also claims to have shut down operations for over 5,000 mining farms in addition to confiscating 213,000 unauthorized mining hardware that was capable of consuming 850 megawatts.

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

Related: The Iranian government took down over a thousand crypto mining farms

Last year, whistleblowers helped Tavanir close down 1,100 crypto mining farms that allegedly did not have proper licenses.

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