Illegal Crypto Mining Drains 2000 MW from Iran's Grid Exacerbating Energy Crisis

Illegal crypto mining is exacerbating Iran’s energy crisis, deepening power shortages that have already strained the national grid and disrupted daily life. Reports indicate that unlicensed operations are siphoning electricity from state infrastructure, consuming up to 2,000 MW of power—equivalent to the output of two nuclear reactors. The Iranian national power company attributes 15–20% of the country’s power deficit to these activities, which are now seen as a major contributor to the ongoing energy shortfall [1].

The impact of these operations is being felt across industries, particularly in energy-intensive sectors like steel manufacturing. One industry executive noted that Iran’s steel sector has already lost over 110 days of production this year, resulting in billions of dollars in direct economic damage. Hospitals and public services are also affected, with frequent blackouts disrupting critical functions. Public unrest is growing as citizens and businesses alike face increasing power rationing and operational instability [1].

Government officials have responded by intensifying efforts to crack down on unlicensed mining. Investigations are underway into suspected illegal mining hubs, and authorities have begun seizing equipment used in such operations. However, experts note that these efforts have been inconsistent, with previous crackdowns failing to curb the issue due to its profitability and enforcement gaps. The persistence of illegal mining since 2019 underscores the challenges of regulating energy consumption in a context of economic sanctions and weak oversight [1].

The economic toll is compounded by political tensions. Allegations that some mining activities may be linked to government officials have further eroded public trust and highlighted broader systemic issues of corruption and mismanagement. Analysts warn that unless more stringent regulatory measures are implemented, and investment in renewable energy sources is accelerated, the crisis is likely to persist, with further economic and social consequences [1].

The situation in Iran mirrors similar issues in neighboring countries. For example, in Q1 2025, Tajikistan reported $3.52 million in losses due to electricity theft tied to illegal mining. These regional parallels suggest a growing challenge that may require coordinated regulatory strategies across the region [2].

As the Iranian government continues its efforts to address the crisis, the path forward remains uncertain. The key challenge will be to strike a balance between supporting digital innovation and ensuring the stability of essential services like electricity supply. Until then, the energy shortages are expected to continue, with far-reaching implications for Iran’s economy and public welfare [1].

Sources:

[1] International business briefs: British exports to US decline ... (https://www.businesslive.co.za/bd/companies/2025-08-14-international-business-briefs-british-exports-to-us-decline-to-three-year-low/)

[2] DeProgram with John Kiriakou and Ted Rall (https://rss.com/podcasts/deprogramshow/)