Iran’s crypto mining industry is facing a widespread illegal mining crisis, with authorities estimating that over 95% of the country’s 427,000 active mining devices are operating without authorization.

Akbar Hasan Beklou, CEO of the Tehran Province Electricity Distribution Company, said on Sunday that Iran has become the world’s fourth-largest crypto mining hub, fueled by the country’s heavily subsidized electricity prices, which have made it a “paradise for illegal miners.”

These unlicensed operations consume more than 1,400 megawatts of power around the clock, placing immense pressure on the national grid and threatening the stability of electricity supplies.

Beklou noted that most illicit miners disguise their activities as industrial facilities to access cheaper power.

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Iran shuts down 104 illegal crypto farms

Authorities have intensified their crackdown on illegal operations. In Tehran Province alone, 104 unauthorized mining farms have been shut down, with 1,465 machines seized, equivalent to the electricity usage of nearly 10,000 households, Beklou said.

The government has identified several hotspots for illicit mining, including Pakdasht, Malard, Shahre Qods and southwestern Tehran’s industrial zones. Inspectors have uncovered farms hidden in underground tunnels and factories using subsidized power connections to evade detection.

Beklou said specialized inspection teams are working with law enforcement to dismantle these operations.

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Iran offers bounty to citizens reporting illegal mining

In August, Iran announced that it is offering cash rewards to citizens who report illegal cryptocurrency mining operations. The CEO of state-run utility Tavanir, Mostafa Rajabi Mashhadi, announced that informants will receive 1 million toman (about $24) for every unauthorized mining device reported.

According to a June report by CoinLaw, Iran ranks fifth globally in Bitcoin (BTC) hashrate distribution, contributing 4.2% of the total network’s computing power. The United States leads with a dominant 44%, followed by Kazakhstan (12%), Russia (10.5%), and Canada (9%).

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