Over 95% of Iran’s Bitcoin Mining Rigs Operate Illegally as Cheap Electricity Fuels Nationwide Power Crisis

Iran’s Crypto Mining Crackdown Exposes A Nation Trapped Between Profit And Power Shortages

Iran’s growing cryptocurrency industry has reached a breaking point.

What began as an economic workaround to sanctions has turned into a sprawling network of illegal miners consuming enough electricity to light entire cities — and threatening to destabilise the country’s fragile power grid.

A Hidden Empire Of Illegal Crypto Farms

Authorities estimate that more than 95% of Iran’s 427,000 active crypto mining rigs operate without proper authorisation.

Akbar Hasan Beklou, head of the Tehran Province Electricity Distribution Company, revealed that these unlicensed operations now consume over 1,400 megawatts of power continuously — roughly equivalent to the supply needed for several million homes.

He described Iran as a “paradise for illegal miners,” where heavily subsidised electricity, costing as little as $0.01 per kilowatt-hour, has transformed the country into the world’s fourth-largest crypto mining hub.

Many operators disguise their rigs as industrial machinery or factory equipment to access cheaper energy rates and avoid detection.

Investigators have found machines hidden in tunnels, basements, and production lines.

In Tehran Province alone, authorities recently dismantled 104 illegal facilities and seized more than 1,400 mining machines, equipment powerful enough to provide electricity for nearly 10,000 households.

Citizens Turned Informants In A National Hunt

To curb the crisis, the Iranian government is offering cash rewards to citizens who report illegal mining activity.

Under the plan announced by state utility Tavanir, informants can earn one million toman — about US$24 — for every unauthorised device they report.

Officials have identified several major hotspots for underground operations, including Pakdasht, Malard, and Shahre Qods.

Special inspection teams, supported by law enforcement, continue to conduct raids across the country to track down illegal farms.

Cheap Power, Costly Consequences

Iran’s electricity subsidies were originally designed to support domestic industries.

But they have also made cryptocurrency mining extraordinarily profitable — and increasingly unsustainable.

Mining a single Bitcoin in Iran can cost as little as $1,300, while it trades for over $100,000 globally.

This imbalance has encouraged both individuals and state-linked groups to exploit cheap power.

Reports suggest that some operations tied to the Islamic Revolutionary Guard Corps (IRGC) even use electricity without paying, further straining the grid.

Energy officials estimate crypto mining contributes to up to 20% of Iran’s electricity shortage issues.

Crypto’s Dual Role In Iran’s Sanctioned Economy

Since 2017, cryptocurrency has offered Iran a way to bypass global banking restrictions.

The country’s share of global Bitcoin mining stands at about 4.2%, ranking fifth after the United States, Kazakhstan, Russia, and Canada.

Source: CoinLaw

Although down from its 7.5% peak in 2021, it remains a crucial source of digital revenue.

Roughly 22% of Iranians are estimated to hold or use cryptocurrency — around 10 million people — as the rial continues to lose value.

In 2024 alone, the national currency fell 37% against the US dollar, pushing many to use Bitcoin as a hedge against inflation.

At the same time, the government restricts how crypto is used domestically.

Licensed miners must sell their Bitcoin directly to Iran’s Central Bank.

Advertising crypto has been banned since February 2025, and all legal trading must occur through a monitored system requiring full user identification.

A Digital Battlefield Amid Sanctions And Cyber Tensions

Cryptocurrency has also become entangled in Iran’s geopolitical conflicts.

On 18 June 2025, the country’s largest exchange, Nobitex, suffered a major hack that wiped out more than US$90 million in crypto assets.

The attack was carried out by pro-Israel hacker group Predatory Sparrow, which sent the stolen funds to inaccessible wallets containing anti-IRGC messages — effectively erasing them.

Nobitex, which processes over US$11 billion in transactions, has faced allegations of links to sanctioned Iranian groups and wallets associated with Hamas, Palestinian Islamic Jihad, and Yemen’s Houthis.

The incident underlined how crypto infrastructure is now part of Iran’s broader conflict theatre.

Following the attack and subsequent military tensions, Bitcoin’s global hashrate briefly plunged by 15%, its sharpest drop in three years.

The Price Of Power In A Digital Age

Iran’s crypto mining dilemma exposes a deeper tension between survival and sustainability.

What began as a clever workaround to economic sanctions has evolved into a costly addiction to cheap energy — one that drains the national grid faster than the state can replenish it.

From Coinlive’s perspective, the real question isn’t about legality or enforcement, but endurance.

How long can a system built on subsidies and secrecy sustain itself before it collapses under its own weight?

Iran’s struggle mirrors a broader global reckoning — as nations chase digital profits, few are truly prepared to pay the real cost of power in the age of cryptocurrency.