Iran is waging a domestic war against illegal digital currency mining operations reportedly draining its already strained power grid—even as United States sanctions, a billion-dollar asset seizure, and the aftermath of active military conflict continue to squeeze the country’s financial system from the outside.
According to a Telegram post by Iran’s Fars news agency this week, the country’s Deputy Minister of Energy, Mostafa Mashhadi, revealed that the government has “plans in place” to identify and shut down illegal digital currency mining operations. The deputy minister added that authorities are offering rewards for tips about the illegal mining operations in Iran.
The country’s concerns about unauthorized digital currency mining are notable given the long-standing perception that Iran allegedly relied on digital assets to mitigate the impact of international sanctions, which have weighed heavily on its economy for decades.
Digital currency mining is incredibly energy-intensive. Digital currency mining companies may consume up to 155,000kWh of electricity to mine a single BTC. The average energy consumed for one BTC transaction is 851.77kWh, which is equivalent to nearly a month of power consumption in an average U.S. household.
Last week, the U.S. authorities sanctioned Nobitex, Iran’s largest digital currency exchange. Washington alleged that the platform facilitated efforts by the Iranian government and sanctioned state-linked entities to bypass Western economic restrictions.
The U.S. government accused the digital asset exchange of facilitating the processing of hundreds of millions of dollars for Iran’s central bank and the Islamic Revolutionary Guard Corps. The U.S. Treasury has also criticized three other digital asset exchanges in the country.
Iran’s sanctions and their effects on the nation
The U.S. and Iran were in active military conflict as recently as February 2026. As a result, Iran has continued restricting access to the Strait of Hormuz for countries perceived as supporting the United States—adding geopolitical volatility to an already fragile economic picture.
Due to the ongoing war, Iran has been restricted in its trade with other countries and has been using digital currencies as payment rails to avoid sanctions.
In 2025, Iran’s digital asset ecosystem reached over $7.78 billion, according to a January 15 report by blockchain analysis firm Chainalysis. Iran’s digital asset activity increased in correspondence to several major domestic and geopolitical events over the past couple of years, including the Kerman bombings in January 2024, Iran’s missile strikes against Israel in October 2024, and the 12-day Iran–Israel war in June 2025.
Chainalysis said that “for Iranian citizens living under a government struggling to maintain economic stability amid inflation rates of 40-50%, cryptocurrency represents not just a sanctions workaround but a way to opt out of a failing system controlled by an increasingly desperate regime.”
More recently, U.S. Treasury Secretary Scott Bessent has revealed the seizure of $1 billion in Iranian assets from various digital asset wallets as part of Operation Economic Fury, which was launched in the spring of this year by Defense Secretary Pete Hegseth as part of a broader strategy by the Pentagon to put “maximum pressure” on Iran. Following Operation Economic Fury, funding for Iran’s weapons programs, regional proxy groups, and military activities was cut off, limiting the nation’s ability to earn, move, and access money.
As for illegal digital currency mining, Iran has been on the lookout to crack down on miners who exploit the BTC block reward amid the worsening power shortage that threatens its economy.
In late 2025, reports showed that Iran is by far the cheapest place to mine digital currencies, as electricity costs miners only $1,324. However, this has made Iran a paradise for illegal miners, Akbar Hasan Beklou, the CEO of Tehran Province Electricity Distribution Company, said.
Beklou said that Iran now hosts over 427,000 BTC mining devices, consuming over 1,400 megawatts of power, of which 95% are operating illegally. He added that these mining farms are often disguised as industrial operations and benefit from subsidized energy intended for legitimate industries.
Additionally, blockchain analytics firm Elliptic revealed that the Middle Eastern country accounts for 4.5% of all BTC mining.
Due to these, Iran has been clamping down on illegal miners and has blamed them for its power shortages. A November 3 report by one official claimed that the Iranian government said local power producers won’t be able to meet a third of the country’s power demand in 2026. As a result, several provinces, such as Tehran, were forced to shut down government office operations.
Watch: The Truth About Mining Profitability
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