Iran is tightening rules on crypto mining as penalties for using subsidized energy will be increased by the Iranian government. The fines will reportedly triple compared to current rates while repeated violations will lead to jail time.
The Tehran Times stated that the government planned to substantially increase fines for mining companies who utilize subsidized electricity on Saturday, citing the country’s Power Generation, Distribution, and Transmission firm. Mohammad Khodadadi Bohlouli, the company’s spokesman, stated:
“Any use of subsidized electricity, intended for households, industrial, agricultural and commercial subscribers, for mining cryptocurrency is prohibited.”
Fines for using subsidized energy in mining will increase by a minimum of three times and a maximum of five times, according to Bohlouli. Repeated violations may result in the termination of a business license and, in extreme cases, the offender’s incarceration.
Mining crypto in Iran
Mining operations for cryptocurrencies are permitted in Iran and have been subject to a licensing process since 2019. The Ministry of Industry, Mining, and Trade had issued approximately 1,000 mining permits as of January 2020.
Iran’s President Hasan Rouhani proposed a temporary suspension on crypto mining in May 2021, citing serious obstacles to the country’s energy grid, such as drought and reduced rainfall. The cycle was repeated in September 2021, when the moratorium was abolished only to be restored in December.
Unauthorized cryptocurrency mining “creates problems in supplying electricity owing to damage to the local power infrastructure and transformers,” according to Iranian Energy Ministry spokesman Mostafa Rajabi Mashhadi, who announced sanctions for the usage of subsidized energy in May 2021.