Iran: Recent Seizures of Crypto Mining Rigs Fuel New Demands for Regulations
Over the past five months, Iran has seized more than 9,400 cryptocurrency mining equipment while dealing with blackouts over the summer.
According to Iran International and Kambiz Nazerian, CEO of Tehran Electricity Distribution Company, these mining rigs were found scattered throughout the city.
A majority of this sum can be attributed to a massive seizure in June, when Iranian police busted an illegal mining farm and seized 7000 equipment, making it the largest seizure of illegal machinery the nation has ever seen. Although the country is rich in oil, recurring power outages and water shortages caused by heat waves have led to protests in a number of cities.
This, shortly after Iranian officials changed several regulations for the cryptocurrency mining sector to make it easier for it to get green power. Licensed miners will now have access to discounted electricity produced across the country from renewable sources.
Iran’s contribution to Bitcoin’s hashrate is falling
The administration often cited cryptocurrency mining as a major factor behind the increase in demand. According to the Cambridge Bitcoin Electricity Consumption Index, Iran contributed to 7.5% of Bitcoin’s hashrate last March. This despite the fact that sources did not specify whether all the rigs seized were specifically for mining Bitcoin. As of January, Iran’s hashrate had dropped to 0.2%.
Iran halted all crypto mining in May for four months as part of measures to deal with rising electricity consumption. In September, the embargo is expected to be lifted.
Iran later cut power to 118 authorized crypto mining farms in June out of concern that there would not be enough energy to meet peak demand during the country’s warmer months.
Additionally, between the winter and summer of 2017, the government imposed restrictions on Bitcoin mining. And even though licensed miners had to follow the law, illegal mining continued.
The need for regulations
Alireza Managhebi, the head of Iran’s group of importers and representatives of foreign companies (Import Association), recently emphasized that for cryptocurrencies to be used as a payment method for imports, a stable legislative environment is needed.
According to Ali Salehabadi, the governor of the Central Bank of Iran (CBI), the acquisition, trading and investment of cryptocurrency is prohibited. In addition, the Iranian Ministry of Intelligence announced in May that 9,219 bank accounts belonging to 545 individuals had been closed due to allegedly shady cryptocurrency and foreign exchange activities.
The Islamic country was ready to accept cryptocurrency as early as 2017. It revised previously published regulations to allow the use of cryptocurrencies to finance imports in October 2020.
