Bitcoin Mining in Iran: The battle against clandestine operations draining the network

The phenomenon of cryptocurrency mining is increasingly causing a visible conflict in Iran. The country’s electrical infrastructure faces unprecedented pressure due to uncontrolled growth in Bitcoin mining operations, many of which operate clandestinely. Subsidized electricity prices have turned the territory into a fertile ground for illegal activities.

Figures Reflecting the Magnitude of the Problem

According to Akbar Hasan Beklou, the top executive of the Tehran Province Electricity Distribution Company, approximately 427,000 mining devices are currently operating in Iran. The concerning part is that over 95% lack legal licenses. This volume of equipment consumes around 1,400 megawatts over 24 hours.

Authorities have intensified their crackdown operations. In Tehran Province alone, during a recent operation, they shut down 104 clandestine farms and confiscated between 1,400 and 1,465 mining machines. When adding the equipment seized in previous years, the total reaches hundreds of thousands of units.

Increasingly Sophisticated Concealment Methods

One of the biggest challenges for regulators is how clandestine operators manage to evade detection. Farms are strategically located within industrial facilities, disguised as legitimate factories. Additionally, they use falsified energy meters or connections originally designed for heavy industry.

This sophistication in concealment techniques significantly complicates control efforts. Equipment can be quickly relocated, adapting to authorities’ movements. Temporary warehouses and unsupervised connections regularly allow these operations to thrive even after raids.

Why Iran Is Becoming a Magnet for Illegal Mining

The country’s subsidized electricity is the main incentive. Prices set well below international market rates make mining profitable even when operating continuously. International sanctions and trade restrictions have also motivated certain actors to see cryptocurrencies as a vehicle to transfer value outside the conventional banking system.

Both small operators and larger networks have exploited these loopholes. Some analysts suggest that certain groups with political-institutional connections enjoy protection or preferential access, complicating the uniform enforcement of laws.

Government Responses and Their Limitations

The Ministry of Energy has announced new repressive measures, including reward programs for tips and audits of industrial meters. However, the response system has been mainly reactive: intensifying after blackouts or demand spikes, not as a planned and consistent strategy.

Experts warn that without structural changes in pricing policies and more systematic enforcement of regulations, miners will continue to find alternatives. The mobility of this equipment and multiple access points to the grid make surveillance exponentially more complex, perpetuating a cycle where illegal mining continues to expand.