Iran’s Energy Ministry has required owners of cryptomining hardware to register data related to themselves as well as the location of their devices in the Comprehensive Trade System of the Ministry of Industries, Mining and Trade.
Mohammad Khodadadi, an official with the Iran Power Generation, Transmission and Distribution Company (Tavanir), made the announcement and noted that the measure is aimed at preventing the use of legally imported hardware from being used in unlicensed cryptomining centers, Way2pay reported.
“Mining centers will be inspected randomly in order to increase the transparency of authorized miners’ operations and make sure that the registered data are valid,” he added.
Khodadadi noted that failing to register miners’ locations or changing the location without reporting it in the system is considered a violation of rules and offenders will be fined.
“The government is working on a new bill, based on which cryptominers who use electricity without holding a valid license will be fined five times higher than the electricity export tariff, which is already 100 times higher than the subsidized rate applied to households.
The official stressed that by implementing strict rules against illegal activities, the government intends to ease the operations of licensed mining farms.
First Vice President Mohammad Mokhber in November had announced new rules for crypto assets, in addition to those approved in 2019.
As per these rules, cryptominers are obliged to receive special permits from the Ministry of Industries, Mining and Trade for importing equipment and the approval of the Iran Standard Organization for using them.
Later, the government outlined details about supplying power to mining centers. Licensed miners have been given options for accessing electricity for their farms, including the establishment of on-site renewable power plants, or using their own small power generators.
Miners using electricity and natural gas will have to pay their bills based on the export tariffs and must reduce operations by half in the summer season.
Electricity prices for cryptomining are subject to currency rates at Nima – the currency platform where forex is purchased by importers from exporters.
New rules require the ministries of oil and energy to announce power rates on a quarterly basis and inform miners about peak season adjustments in advance.
In the previous regulations, tax breaks were offered to miners who repatriated their earnings to the country. However, the government later decided to remove the exemption and treat cryptominers like other exporters.
Cryptocurrency mining centers can be established in the free trade zones where local authorities are in charge of licensing instead of the Industries Ministry.
Among other things, the new regulations state that mining crypto assets by using power (natural gas or electricity) allocated for any other purpose is illegal and those in breach will be penalized.
Before imposing penalties in the past, Tavanir used to confiscate illegal cryptomining equipment, cut electricity and oblige offenders to pay for damages inflicted on the national grid.
However, at present, Tavanir has urged policymakers to tighten the rules targeting illegal miners and insists that “the existing regulations are not preventative enough.”
According to Tavanir, more than 7,200 unauthorized cryptomining centers have been identified and closed since 2020, which used 3.84 trillion rials ($16.5 million) in subsidized electricity and inflicted 380 billion rials ($1.3 million) in damages on the national grid.
Observers, however, say the new rules do not go far enough in addressing the deficiencies and preventing losses.
The Majlis Research Center, the research wing of the parliament, has also taken a stance on the negative impact of the government’s regulations on cryptomining and dismissed them as a failure.
Like previous regulations, the new rules only cover mining of cryptocurrencies and extends the ban on trading cryptos.
"Traders should take responsibility for using cryptocurrencies and beware that the risks will not be covered or compensated by the government and banks," it said.
The Central Bank of Iran is tasked with developing a platform through which licensed miners could sell their cryptocurrencies for importing goods.
