Iran Shutters Two Crypto Mining Farms Following Power Spike

News outfit Radio Free Europe has reported the seizure of roughly 1,000 bitcoin mining machines from two abandoned factories in Iran.

Iranian authorities reportedly seized the machines on June 27 due to power surges they were causing.

A spokesman for the country’s Energy Ministry announced following the raid that crypto mining operations were destabilizing Iran’s power grid and restricting electrical access for regular households and businesses.

According to the announcement, Iran’s electrical consumption spiked seven percent. The Energy Ministry noted that the power needed to mine one bitcoin is equal to that required to power 24 residential units for a whole year.

Cheap power

Electricity costs in Iran can run as low as $0.006 per kilowatt-hour thanks to the country’s heavily subsidized electricity.

Such cheap power has led to the proliferation of crypto mining operations in the country despite the illegal nature of using state electricity to mine for bitcoin.

According to the country’s Energy Ministry, some unscrupulous miners have even set up facilities in schools and mosques to avoid paying utility bills.

Iran’s Energy Ministry has already proposed setting a special, non-subsidized price for crypto miners’ power-hungry mining rigs. In the meantime, government authorities will continue to pursue mining operations making use of subsidized electricity.

Crypto as sanctuary

Low-cost power isn’t the only reason crypto miners and crypto use, in general, are spreading in the country.

Analysts point to the continued devaluation of the Iranian real as a significant cause of Iranian citizens turning to cryptocurrencies for sanctuary.

Heavy sanctions imposed by the US have also contributed to the rise of crypto use in the country, with citizens seeing crypto as a way to subvert and bypass the sanctions.