Iran Offers $24 Rewards for Reporting Illegal Crypto Miners

To curb the growing issue of illegal cryptocurrency mining, the Iranian government has introduced a new initiative: offering a cash reward of $24 to citizens who report unauthorised crypto mining activities.

Overview

Temperatures have skyrocketed to 113 degrees Fahrenheit (45 degrees Celsius) in some regions of the country, putting immense pressure on the power grid. The CEO of Tavanir suggested that for the state-run electricity company, the situation is exacerbated by crypto miners, as reported by the Iran-focused news outlet Iran International. CEO of Tavanir, Mostafa Rajabi Mashhadi, said, “A bounty of 1 million toman will be awarded to individuals who report every single unauthorised cryptocurrency mining equipment.” 

He added, “Opportunistic individuals have been exploiting subsidised electricity and public networks to mine cryptocurrencies without proper authorisation. This unauthorised mining has led to an abnormal surge in electricity consumption, causing significant disruptions and problems within the country’s power grid.” This measure comes in response to the challenges posed by illegal mining operations, which have exacerbated energy shortages in the country. As Iran grapples with its energy crisis, the government is aggressively regulating the crypto-mining industry and mitigating its impact on the national power grid.

The Rise of Illegal Crypto Mining in Iran

Iran has become a hotspot for crypto mining due to its subsidised electricity rates, making mining operations profitable. However, not all mining activities are legal. Many miners operate without proper licence, bypassing government regulations and consuming large amounts of electricity without oversight. This has significantly strained the country’s power grid, especially during peak consumption, resulting in blackouts and other energy-related issues. Mishhadi highlighted that authorities had uncovered 230,000 illegal crypto-mining rigs, consuming up to 900 megawatts of power — equivalent to the electricity usage of an Iranian province with 1.4 million residents. 

Iran International reports that Iranian authorities frequently announce the discovery of illegal crypto-mining operations, many of which are run out of schools and mosques that benefit from free or subsidised electricity. Illegal crypto mining has flourished in Iran for several reasons. The country’s economic situation, worsened by international sanctions, has driven many Iranians to seek alternative sources of income, with crypto mining emerging as a viable option. The anonymity and decentralised nature of cryptocurrencies also make it difficult for authorities to track and shut down illegal operations. As a result, the government has faced considerable challenges in regulating this burgeoning industry.

Iran’s Incentive Program to Combat Illegal Mining

To combat the problem of illegal crypto mining, the Iranian government has introduced a financial incentive program that rewards citizens for reporting unauthorised mining activities. Under this program, individuals who provide information leading to the discovery of illegal mining operations are eligible to receive a cash reward of $24. The hope is that by enlisting the public’s help, the government can more effectively identify and shut down illegal mining operations, thus alleviating the strain on the power grid. This initiative is part of a broader strategy to regulate the crypto-mining industry in Iran.

The government has already implemented strict licensing requirements for mining operations and has conducted numerous raids on illegal facilities. The cash reward program adds a new enforcement layer, encouraging ordinary citizens to report unlawful activities actively. While the reward may seem modest, it is significant in Iran’s economy, where $24 can represent a meaningful amount of money for many people. The government hopes this financial incentive will increase reports of illegal mining operations, making it more difficult for such activities to continue undetected.

The Broader Impact on Iran’s Energy and Crypto Sectors

The government’s crackdown on illegal crypto mining is expected to have far-reaching consequences for Iran’s energy and crypto sectors. On the one hand, reducing the number of illegal mining operations could help stabilise the country’s power grid and prevent further blackouts. This would be a welcome relief for the general population, who have had frequent power outages due to the strain on the grid. On the other hand, the crackdown could also have implications for Iran’s crypto industry as a whole. 

Legal miners may face increased scrutiny and regulation, potentially driving up the cost of compliance. This could lead to a decrease in mining activity, impacting the overall availability of cryptocurrencies in the Iranian market. Additionally, the government’s aggressive stance on illegal mining might push some miners to move their operations underground or out of the country. This could result in a shift in the global landscape of crypto mining, as Iran has been one of the leading countries in mining activity. If the government’s measures are successful, they could serve as a model for other countries facing similar challenges with illegal mining operations. In May 2024, Venezuela banned crypto mining, citing the need to protect the nation’s power grid from the excessive energy consumption associated with mining activities. 

Iran’s decision to offer a $24 reward for reporting illegal crypto miners underscores the seriousness of the energy crisis the country is facing. By involving the public in the fight against unauthorised mining, the government aims to alleviate the pressure on its power grid and bring the burgeoning crypto-mining industry under tighter control. However, this initiative also raises questions about the future of cryptocurrency mining in Iran and the potential impact on the global crypto market. As the situation unfolds, monitoring how these measures affect Iran’s energy sector and the broader economy will be essential.