Iranian power utility Tavanir has confiscated over 240,000 illegal cryptocurrency mining devices consuming about 800 MW of electricity, with estimates suggesting three times as many remain active across the country, Mehr News Agency reported on February 14.

The national power company has been in a fight with crypto-mining farms across the country for years in what appears to be a losing battle due to the exceedingly low price of electricity in the country, which has attracted Chinese mining farms in recent years as well as thousands of underground mining farms which are slowly being discovered. 

Mustafa Rajabi Mashhadi, CEO of Tavanir, warned that illegal crypto mining operations could be consuming up to 3,000 MW of power – equivalent to three Bushehr nuclear power plants (NPPs) following a series of blackouts causing outrage across the capital.

"Mining just one Bitcoin consumes as much electricity as 440 residential units in Tehran, effectively cutting off power to a 500-person neighbourhood for a month," he said.

The company estimates that consumers are charged only one-tenth of the actual cost of electricity production, with heavily subsidised rates, especially in warmer regions, making Iran attractive for illegal mining operations.

Mashhadi explained that this pricing policy has led to unconstrained consumption growth. "These illegal miners are a sinister phenomenon fuelled by cheap electricity prices, clearly violating the public's rights," he said. The official highlighted how Iran's power generation capacity has grown 13-fold since the revolution, from 7,000 MW to over 94,500 MW, while consumption has increased 23-fold.

The illegal devices are reportedly smuggled into the country via boats and unauthorised entry points before being connected to the national grid. Tavanir previously called for continued support from the economic security police in tracking and confiscating the equipment. However, police are often under pressure elsewhere to target the farms.

To produce the 800 MW of power currently consumed by seized miners, Iran would need to build 1,200 MW of new power plant capacity, according to Tavanir's calculations.

Iran banned the advertisement of crypto mining machines last year in a diktat from the Pezeshkian, ICTNA reported on December 1.

In a letter by the Ministry of Communications addressed to major online retailers, the ministry referenced a President Rouhani-era resolution dated April 14, 2016, by the Council of Ministers banning the advertisement of "high-consumption goods" without explicitly naming mining machines in the note.

The ministry also called for removing advertisements for training cryptocurrency mining devices and high-energy filament bulbs.

Iran is no stranger to crypto developments, having been focused on using the anonymity of financial transfers to its advantage in the face of crushing international sanctions.

As part of this move to seize on the uses of crypto in January 2022, the Central Bank of Iran (CBI) said it planned to launch  CBDC and use crypto to settle international settlements. As part of that scheme, the CBI and the ministry have agreed to link the central bank’s platform with the ministry’s comprehensive trading system (CTS) to facilitate trading.

Iran mulled launching an “e-toman” for the past couple of years to work around sanctions and break free of US restrictions on payment controls, including SWIFT and interbank transfers. However, technical and political concerns have slowed down the roll-out of the cryptocurrency, currently designated the Central Bank Digital Coin (CBDC).