The usage of subsidised energy in crypto mining will face harsher sanctions from the Iran government. This is another step in the country’s tightening of mining regulations, which has been hampered by recent energy shortages.
The Tehran Times reported on April 16 that the government intends to substantially increase fines for mining companies who utilise subsidised electricity, citing the country’s Power Generation, Distribution, and Transmission business. Mohammad Khodadadi Bohlouli, a corporate representative, explained:
“Mining cryptocurrencies with subsidised electricity meant for families, industrial, agricultural, or commercial subscribers is illegal.”
Fines for using subsidised energy in mining, according to Bohlouli, will increase by a minimum of three times and a maximum of five times. Repeated violations can result in a business’s licence being revoked and potentially the offender being imprisoned.
Cryptocurrency mining has been permitted in Iran since 2019
Since 2019, cryptocurrency mining has been permitted in Iran and is subject to a licensing process. Over 1,000 mining permits had been awarded by the Ministry of Industry, Mining, and Trade by January 2020. In May 2021, Iran’s President Hasan Rouhani issued a temporary embargo on crypto mining due to certain serious obstacles to the country’s energy grid, such as dryness and reduced rainfall. When the moratorium was abolished in September 2021, it was restored in December, completing the cycle.
Unauthorized cryptocurrency mining “creates problems in supplying electricity owing to damage to the local power infrastructure and transformers,” according to the Iranian energy ministry’s spokesman Mostafa Rajabi Mashhadi, who announced sanctions for using subsidised energy in May 2021.