Bitcoin: Iran makes record seizure of 7,000 mining machines | finance

Iranian police confiscated 7,000 crypto-currency mining machines in an illegal operation set up in an abandoned factory west of the country’s capital Tehran. This is the largest seizure of this type of equipment ever recorded in the country. The activity was temporarily banned in late May as part of efforts to avoid recurrent blackouts during the hot, dry summer period.

Cryptocurrency Mining Center (Image: Marko Ahtisaari/Flickr)

This past Tuesday (22), Hossein Rahimi, head of the Tehran police, told the state news agency IRNA that authorities have recently identified and seized about 7,000 machines dedicated to mining bitcoin (BTC) and other cryptocurrencies. The digital asset extraction center operated illegally from an abandoned building in an industrial region near the capital.

Iran temporarily banned cryptocurrency mining

Given the high energy consumption associated with cryptocurrency mining, Iran has ruled that the activity is banned for at least four months while the country is experiencing energy difficulties. Several blackouts have been taking place during this dry season in the Iranian summer, which has severely affected hydroelectric plants, weakening the capacity of the national electricity supply grid.

Cryptocurrency mining is an activity that has been growing in Iran in recent months. There are two main causes for this: the economic crisis and the abundance of fossil fuels that power thermoelectric plants and provide cheap electricity. Thus, Iranians saw an opportunity for profit at a good cost, while Chinese miners also began to migrate to the country.

Mining is booming in Iran

According to blockchain analyst Elliptic, about 4.5% of all bitcoin mining takes place in Iran, generating hundreds of millions of dollars in cryptocurrencies that are used to lessen the impact of US sanctions. United States over the country.

In March, the Iranian government published a study in which it suggested the state adoption of cryptocurrency mining and encouraged the growth of activity in the country. The document stated that the extraction of bitcoin and other assets could bring economic benefits to various sectors of the economy, generating income and jobs.

Prepared by the Iranian Presidential Center for Strategic Studies, the study even estimated that, with proper state intervention, Iran could generate $2 million a day and $700 million a year through cryptoactive mining. However, it appears that the plan has already become a problem a few months after it was announced.

Cryptocurrencies help economy and avoid sanctions

Cryptocurrencies become popular in Iran (Image: David McBee/Pexels)

Cryptocurrencies become popular in Iran (Image: David McBee/Pexels)

The pseudo-anonymous nature of cryptocurrencies also helps Iranians circumvent US sanctions by making it difficult to identify the source of income and by making it possible to allocate cryptoactives abroad. In Tehran, digital coins can be used to pay for imports of authorized goods, for example.

In addition, while China, responsible for around 65% of the world’s bitcoin hash rate, is cracking down hard on cryptocurrency mining, Iran presents itself as a cheap energy alternative for miners to settle.

Government-subsidized electricity has succeeded in attracting new digital asset extraction centers, but Elliptic estimates the energy they use is equivalent to 10 million barrels of crude oil per year, or 4% of all Iranian exports of the commodity. registered in 2020.

The local economy has been severely affected since 2018, when then-President Donald Trump re-imposed sanctions on the Islamic Republic because the country left the nuclear deal. Now, Joe Biden’s government is seeking to renegotiate the terms and reinstate it.

With information: Reuters

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