Iranian Police Reportedly Crack Down on Illegal CryptominingNews Agency: More Than 10,000 Unlicensed Computers Used in Mining Operations Confiscated
Iranian police have seized more than 10,000 computers that were illegally mining cryptocurrency without the required license, according to the state-run Islamic Republic News Agency.
Police found about 7,000 cryptomining machines operating in a large warehouse and uncovered another 3,000 scattered across 50 other locations during a 48-hour coperation that law enforcement conducted in Tehran, the news agency reports. Those miners apparently broke the law by not obtaining the licenses needed to legally operate a cryptocurrency mining operation and operating after the Iranian government placed a four-month moratorium on cryptomining in the country on May 26 to help control electricity use.
"These miners were unlicensed and were probably not complying with the ban," says Tom Robinson, CEO of the cryptocurrency tracking firm Elliptic.>/p>
"Experts on the country's electrical grid estimated that the miners operating at full capacity would amount to roughly 4% of the average daily energy consumption in Iran," IRNA reports.
Legally mining cryptocurrency - with a license - had been widespread in Iran until the implementation of the ban. In fact, the nation was home to about 4.5% of the world's bitcoin mining operations - some of them operated by Chinese firms, Elliptic reports. Since 2019, these operations have generated hundreds of millions of dollars in revenue for Iran, which the country has used to buy goods and services that the economically strapped nation could otherwise not afford, Elliptic points out.
Bitcoin's Recent Struggle
CoinDesk tracked bitcoin's value as temporarily falling below the $30,000 mark on Tuesday for the first time since January. In April, a bitcoin was valued at $63,000, according to CoinDesk.
The devaluation happened the day after China's largest bank reported it would also crack down on mining operations.
On Monday, China's People's Bank of China urged other banks to clamp down on cryptocurrency trading. Earlier, China's State Council said it would tighten restrictions on bitcoin trading and mining, Reuters reports.
Bitcoin and other cryptocurrencies are generated using computing power.
"New bitcoins are generated by a competitive and decentralized process called mining. This process involves that individuals are rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange," according to bitcoin.org.
"The bitcoin protocol is designed in such a way that new bitcoins are created at a fixed rate. This makes bitcoin mining a very competitive business. When more miners join the network, it becomes increasingly difficult to make a profit and miners must seek efficiency to cut their operating costs," bitcoin.org says. Bitcoin creation will stop after 21 million bitcoins are generated.