**Iran’s Crypto Boom Pushes Fragile Power Grid to the Breaking Point**
With 95% of mining operations running illegally and consuming enough power to light up entire cities, Iran’s cryptocurrency boom is placing significant strain on an already fragile power grid.
### A Nation Turning to Digital Currency
Iran’s interest in cryptocurrency exploded after 2017 when international sanctions cut off access to global banking systems. Unable to use traditional financial channels, the country turned to Bitcoin and other digital currencies as a way to bypass restrictions.
Today, Iran controls about 4.2% of the global Bitcoin mining power, ranking fifth worldwide behind the United States, Kazakhstan, Russia, and Canada. Although this is a drop from 7.5% in March 2021, it still represents a substantial mining operation.
The appeal is clear: electricity in Iran costs between $0.01 and $0.05 per kilowatt-hour, making it incredibly cheap to mine Bitcoin. With costs as low as $1,300 to mine one Bitcoin—which can sell for over $100,000—the profit margins are enormous.
Around 22% of Iran’s population now uses or owns cryptocurrency, totaling an estimated 10 million users. For many Iranians facing severe inflation—the rial lost 37% of its value against the dollar in 2024 alone—crypto offers a way to protect savings from collapse.
### The Illegal Mining Problem
Iranian officials report approximately 427,000 active crypto mining devices operating across the country. Shockingly, about 95% of these are illegal and run without proper authorization.
These underground operations consume roughly 2,000 megawatts of electricity—equivalent to the output of two nuclear reactors. Energy officials say crypto mining now accounts for 15-20% of the country’s electricity shortages.
Illegal miners hide their operations everywhere: abandoned homes, rural farms, underground tunnels, and even industrial facilities disguised as legitimate businesses.
During an internet outage related to conflict with Israel, power consumption dropped by 2,400 megawatts when over 900,000 illegal mining devices shut down, revealing the true scale of the problem.
Licensed miners face high electricity tariffs, making legal operations unprofitable and pushing most miners underground. Meanwhile, many operations linked to Iran’s Islamic Revolutionary Guard Corps (IRGC) reportedly use electricity for free, further straining the power grid.
In Tehran Province alone, authorities have dismantled 104 illegal mining farms and seized 1,465 machines—enough to power nearly 10,000 households. Across the country, over 250,000 illegal devices have been confiscated.
To combat the issue, the government now pays citizens approximately $24 to report illegal mining operations, effectively turning regular people into informants.
### Government Control and Crackdowns
Iran legalized cryptocurrency mining in 2019, viewing it as a way to generate revenue despite sanctions. However, the government imposed strict regulations: licensed miners must sell their Bitcoin directly to Iran’s Central Bank.
In December 2024, the Central Bank abruptly blocked all cryptocurrency-to-rial transactions on websites. By January 2025, these channels reopened but only through a controlled system requiring full access to user data. Then, in February 2025, Iran banned all cryptocurrency advertising both online and offline.
The government is walking a fine line. While crypto mining offers an economic lifeline and helps bypass sanctions, the massive power consumption threatens grid stability and sparks public anger during blackouts.
### Sanctions Evasion and International Response
In 2024, sanctioned countries and entities, including Iran, received $15.8 billion in cryptocurrency, accounting for 39% of all illicit crypto transactions worldwide. Networks aiding Iran in selling oil facilitated over $100 million in cryptocurrency transfers between 2023 and 2025; broader networks handled more than $600 million.
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has intensified crackdowns by sanctioning individuals and companies in China, Hong Kong, and the UAE connected to these operations.
Iran’s IRGC uses cryptocurrency to fund activities and support regional proxy groups. In 2022, the U.S. sanctioned two Iranians linked to the IRGC for using crypto exchanges to launder money from cyberattacks.
### The Nobitex Hack: Crypto Warfare
On June 18, 2025, Nobitex—Iran’s largest cryptocurrency exchange—suffered a massive hack. Pro-Israel hacker group Predatory Sparrow stole over $90 million in Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies.
The attack was politically motivated. Rather than keeping the stolen assets, the hackers sent the cryptocurrency to inaccessible wallet addresses containing anti-IRGC messages, effectively destroying the funds as a political statement.
Nobitex handles over $11 billion in transactions, more than the next ten largest Iranian exchanges combined. Past investigations linked the exchange to sanctioned IRGC operatives and wallets associated with Hamas, Palestinian Islamic Jihad, and Houthi groups.
The hack occurred amid escalating tensions between Israel and Iran, highlighting how cryptocurrency infrastructure has become a target in modern geopolitical conflicts.
When U.S. forces struck Iranian nuclear facilities shortly after, Bitcoin’s global hashrate dropped 15%—the sharpest decline in three years—fueling speculation about disrupted Iranian mining operations.
### The Road Ahead
Iran’s cryptocurrency industry exists in a challenging space between economic necessity and practical constraints. Experts estimate Iran has mined between 60,000 and 200,000 Bitcoins since 2018, though exact figures remain uncertain due to the underground nature of 85% of operations.
As economic pressures mount and the rial continues losing value, more Iranians are turning to cryptocurrency. Crypto outflows from Iran surged to $4.18 billion in 2024—a 70% increase from the previous year—as people move money out of the country’s unstable currency.
The government faces competing priorities: crack down on mining to preserve the power grid or allow it to continue as an economic tool for sanctions evasion.
Meanwhile, international enforcement agencies are becoming increasingly sophisticated in tracking crypto transactions and disrupting Iranian financial networks.
—
Iran’s crypto story is a complex interplay of economics, politics, and technology, reflecting broader challenges faced by countries navigating sanctions and energy constraints in the digital age.
https://bitcoinethereumnews.com/bitcoin/irans-bitcoin-mining-industry-inside-the-worlds-fifth-largest-operation-amid-sanctions-and-energy-crisis/?utm_source=rss&utm_medium=rss&utm_campaign=irans-bitcoin-mining-industry-inside-the-worlds-fifth-largest-operation-amid-sanctions-and-energy-crisis