The Iranian government has given licensed crypto mining companies the green light to continue their operations after a three-month ban imposed by former President Hassan Rouhani.
A report unveiled this news earlier today, noting these changes come after the summer heat decreased and Ebrahim Raisi took the presidential office on August 3. Reportedly, Rouhani made it illegal to mine crypto on May 26, 2021, after a spell of power outages.
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According to the report, Rouhani attributed the outages to the summer heat, which saw some days record temperatures as high as 49 degrees Celsius. At the time, Rouhani said crypto mining was consuming over 2GW of power daily and that 85% of the mining operations in the country were unlicensed.
While the temporary ban on mining sought to minimize stress on the country’s power grid, some Iranians continued mining illegally. As a result, authorities seized 7,000 mining rigs in June. Ali Sahraee, the Director of Teheran’s Stock Exchange (TSE), also stepped down authorities discovered BTC mining rigs in the TSE building.
Statistics indicate that Iran accounts for 4.5% to 7% of the global crypto mining output. The Iranian nets approximately $1 billion (£0.74 billion) in revenue annually, and the country has, reportedly, been using mining as an avenue to circumvent US sanctions.
While Iran’s central bank prohibits the trading of cryptocurrencies mined abroad, digital currencies are widely available on the black market.
Crypto enthusiasts should be careful not to violate sanctions
However, this option might no longer be available, seeing as the US government is increasingly intensifying scrutiny on crypto. With the US prohibiting its citizens from transacting with sanctioned firms and countries, exchanges and traders must be wary not to violate sanctions, an offence that might attract enforcement action.
According to Tom Robinson, the Chief Scientist and co-founder of Elliptic, a blockchain analysis firm,
Anyone engaging in a crypto transaction is at risk of violating sanctions.
He added that if Iran mines 4.5% of all BTC, there is a 4.5% chance that any Bitcoin (BTC/USD) transaction will involve a sender paying a transaction fee to a miner in the country.
This news comes after the US Treasury’s Office of Foreign Assets Control (OFAC) directed BitPay to pay a $507,375.00 (£375,921.75) fine for flouting sanctions on countries like Iran and Cuba.
OFAC noted that it detected 2,102 instances between 2013 and 2018 in which the exchange allowed citizens in sanctioned countries to complete transactions on its platform.
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