Iran cuts off electricity to crypto miners to save energy for the summer period

    21 Jun 2022

    Iran’s Ministry of Energy has decided to cut down the supply of electricity given to the authorized crypto mines units of the country to ensure the enough power supply for the citizenry. This decision will be implemented on June 22, Tehran Times reported.

    A spokesman for the Iranian Energy Ministry, Mostafa Rajabi Mashhadi, said that the Asian country is anticipating a higher energy consumption rate from next week. As reported by Tehran Times, the government made this decision to ensure there is enough energy supply for the citizenry.

    The Government of Iran gave over 1,000 crypto mining licenses in January this year. Now, 118 authorized mines are using the electricity supply of the country. The country recorded a consumption of 62,500 megawatts (MW) in the previous week. The power consumption is expected to cross the bar of 63,000 MW, which will limit the supply for the country.

    In 2021, the Iranian government also banned crypto mining to save the country’s power supply. It was recorded that the illegal mines had consumed nearly 600 MW of the power supply back then. The ban is in action till the start of March this year. It was estimated to free up to 209 MW of power supply in the domestic sector.

    Iran has been dealing with the issue of illegal mining for the longest time. In 2019, the Government approved the crypto mines to function in Iran. In early 2020, around 1,000 mines were granted to use the power supply, which led to an increase in mining activity in the country. However, some illegal miners started using the domestic power supply.

    Last year, the Iranian minister also warned the unauthorized miner to pay heavy fines for the damage caused to the country’s electricity resource because of their actions. Mining cryptocurrency has increased the problems for the electric industry of Iran and its resources which is already suffering from climate issues like drought and shortage of rain.

    According to data from CryptoRank published on June 17, the drop in Bitcoin price has made mining significantly less profitable. The data shows the average cost of mining and Bitcoin price are now at par.

    Meanwhile, a Chainalysis report said that Bitcoin mining funneled more than $186 million into Iranian-based cryptocurrency services between 2015 and 2021. The report also stated that illegal Bitcoin miners accounted for around 85% of the cryptocurrency-related activity in the country, which was confirmed by the Iranian president later.

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