Iran’s local cryptocurrency community welcomes the legitimization of mining as an industry but feels that miners aren’t being treated fairly.

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Iran Cryptocurrency Mining Regulations Detailed » Bitcoin Magazine

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Iran’s Ministry of Industry, Mine and Trade is close to finalizing a document that paves the way for legitimizing cryptocurrency mining for local and foreign citizens in the foreseeable future.



In early August 2019, Iranian President Hassan Rouhani’s cabinet issued a directive that recognized cryptocurrency mining as an industry for the first time and defined <a href="https://bitcoinmagazine.com/articles/heavy-handed-regulations-run-cryptominers-out-of-iran">general tenets</a>. Among other things, the directive obligated the ministry to come up with a framework based on which cryptocurrency miners could start working transparently. Previously, those miners had been operating without any state supervision.



According to a transcript of the document shared with Bitcoin Magazine, which will be put into effect as soon as industry minister Reza Rahmani signs it, legitimate cryptocurrency miners will have to obtain two permits.



<h2>Document Highlights</h2>



First, in order to secure a license for establishing a cryptocurrency mining business, one natural or legal person — which could be local or foreign — will have to provide a business ID and estimates of investments, job creation, capacity, machinery valuations and a business plan, among other things.



Business establishment licenses last for 12 months and can be renewed after the owner provides project progress reports.&nbsp;



Mining farms will have to be established on industrial land in accordance with industrial units regulations and will not be subject to proximity limitations, which means that they can be situated both inside and outside of metropolises.



“The total power consumption of cryptomining equipment of each industrial unit is equal to at least 30 kilowatts and licenses cannot be issued for equipment with lower consumptions,” the document says.



The energy to be consumed by cryptocurrency mining farms is to be provided either from the national power grid or privately through non-state power plants, renewable sources or gas-powered producers.



The second permit from the industry ministry is the one that allows for a cryptocurrency mining farm to operate. To obtain this permit, business owners will have to declare what kind of devices and how many of them they have, what company developed them and how much power they consume, among other criteria. These permits will last for 12 months and can be renewed upon personal inspection by an industry ministry representative.



<h2>Destigmatizing Cryptocurrency</h2>



Cryptocurrency and blockchain researcher <a href="https://twitter.com/ham3dsal3hi">Hamed Salehi</a> believes that the document and overall government regulations are very significant for the local cryptocurrency community.



“Not only do they recognize cryptomining as an industry, but they effectively legitimize bitcoin and other cryptos, blocking other entities from completely prohibiting their use,” he told Bitcoin Magazine.



There were no regulations aimed specifically at cryptocurrencies in Iran until April 2018, when the Supreme Council of Anti-Money Laundering directed the central bank to publish a directive, barring all financial institutions from handling cryptocurrencies.&nbsp;



Issued shortly after a currency crisis that was triggered by reimposition of unilateral United States sanctions, the directive was a misguided attempt at preventing capital flight that only led to mass confusion. While there were no laws banning use of cryptocurrencies, several entities including the cyber police have said that employing them is illegal.



Then, in late January 2019, the central bank published a draft regulatory framework that proposed legalizing the use of cryptocurrencies and the establishment of licensed exchanges, but called for banning cryptocurrencies from being used as methods of payment inside the country. The framework has yet to be ratified, partly <a href="https://www.coindesk.com/irans-crypto-regulations-whats-happening-behind-closed-doors">due to its many faults and shortcomings</a>.&nbsp;



The directive ratified by the cabinet in August 2019 did not outlaw cryptocurrency use and only warned people wishing to use them of the associated potential risks of capital loss.



“Before the [August] cabinet directive, anything having to do with cryptos carried the stigma of illicit activity,” Salehi said.



<h2>Cryptocurrency Miners Still Unhappy</h2>



But while the new regulations legitimize cryptocurrencies and mining, the <a href="https://bitcoinmagazine.com/articles/new-research-offers-insight-into-iranian-bitcoiners">local community</a> remains concerned about their ramifications for the fledgling industry.



Some large-scale professional cryptocurrency miners are already <a href="https://bitcoinmagazine.com/articles/heavy-handed-regulations-run-cryptominers-out-of-iran">moving their operations abroad</a> to more hospitable neighboring destinations including Russia, Georgia, Kazakhstan, Armenia and even Iraq.



They complain that the proposed electricity prices are irrationally high and coupled with other expenses — such as taxes, import tariffs and the other costs associated with operating a cryptocurrency mining farm that are already gravely high due to Iran’s significantly weakened national currency — these could render their businesses obsolete.



As ratified by the cabinet, the price of electricity offered to miners will be equal to the average rial price at which Iran exports its electricity to other nations, or to 70 percent of the average rial price at which the country ships off its natural gas.



The Ministry of Energy does not disclose its electricity export prices to the public, but Salehi said that the price amounts to between five to seven cents per kilowatt/hour according to private estimates.



“Now there are rumors that the energy ministry is looking at a price of about 6,500 rials (around 5.5 cents) for eights months of the year and a stratospheric price of over 20,000 rials (above 17 cents) per kilowatt/hour for the remaining four warm months that see higher energy consumption,” the researcher said.



This is while neighboring countries offer rates that vary from 3.5 cents to 5 cents per kilowatt/hour, according to local research.



Iranian miners previously used industrial-grade subsidized electricity that was usually priced under two cents per kilowatt/hour. The government acted to <a href="https://bitcoinmagazine.com/articles/iranian-cryptocurrency-miners-may-lose-subsidized-electricity">regulate them</a> since it believed they were benefiting from cheap electricity at the expense of the government and putting a strain on the national power grid.&nbsp;&nbsp;



“I think if passed in their current form, the government regulations will mostly eliminate major private players and replace them with state-linked actors, many of whom still enjoy various forms of subsidies,” Salehi said.



This, he said, is particularly true since bitcoin’s mining reward will be halved in less than one year. This has prompted professional cryptocurrency miners around the world to add a large number of new and more efficient devices to their farms to take advantage of the time they have until their operations are strained by the halving.&nbsp;&nbsp;&nbsp;



<h2>“A Losing Game”</h2>



Moreover, Salehi believes that the government is “throwing itself into a losing game” since its regulations run the risk of driving many would-be transparent and legitimate players underground. He warns that the new regulations could increasingly encourage the smuggling of cryptocurrency mining gear and prompt many people to each plug in a handful of devices at residential units illegally.



Lastly, as ratified by the cabinet and the Iranian National Tax Administration, cryptocurrency miners can become exempt from paying taxes if they repatriate their foreign currency yields into NIMA, an online currency system run by the central bank that accepts foreign currency yields of exporters <a href="https://www.aljazeera.com/ajimpact/iran-foreign-exchange-rates-190627185807737.html">at a unique rate</a> lower than the open market rate and provides importers with their required foreign currencies at that same rate.&nbsp;



The cabinet’s directive states that cryptocurrency miners will be obligated to sell their foreign currency yields at the NIMA rate but does not say that they can receive their required foreign currencies for imports at that same cheaper rate. The local cryptocurrency community sees this as another slight.

Iran&rsquo;s local cryptocurrency community welcomes the legitimization of mining as an industry but feels that miners aren&rsquo;t being treated fairly.

Iran Cryptocurrency Mining Regulations Detailed &raquo; Bitcoin Magazine

Iran&rsquo;s Ministry of Industry, Mine and Trade is close to finalizing a document that paves the way for legitimizing cryptocurrency mining for local and foreign citizens in the foreseeable future. In early August 2019, Iranian President Hassan Rouhani&rsquo;s cabinet issued a directive that recognized cryptocurrency mining as an industry for the first time and defined general tenets. Among other things, the directive obligated the ministry to come up with a framework based on which cryptocurrency miners could start working transparently. Previously, those miners had been operating without any state supervision. According to a transcript of the document shared with Bitcoin Magazine, which will be put into effect as soon as industry minister Reza Rahmani signs it, legitimate cryptocurrency miners will have to obtain two permits. Document Highlights First, in order to secure a license for establishing a cryptocurrency mining business, one natural or legal person &mdash; which could be local or foreign &mdash; will have to provide a business ID and estimates of investments, job creation, capacity, machinery valuations and a business plan, among other things. Business establishment licenses last for 12 months and can be renewed after the owner provides project progress reports.&nbsp; Mining farms will have to be established on industrial land in accordance with industrial units regulations and will not be subject to proximity limitations, which means that they can be situated both inside and outside of metropolises. &ldquo;The total power consumption of cryptomining equipment of each industrial unit is equal to at least 30 kilowatts and licenses cannot be issued for equipment with lower consumptions,&rdquo; the document says. The energy to be consumed by cryptocurrency mining farms is to be provided either from the national power grid or privately through non-state power plants, renewable sources or gas-powered producers. The second permit from the industry ministry is the one that allows for a cryptocurrency mining farm to operate. To obtain this permit, business owners will have to declare what kind of devices and how many of them they have, what company developed them and how much power they consume, among other criteria. These permits will last for 12 months and can be renewed upon personal inspection by an industry ministry representative. Destigmatizing Cryptocurrency Cryptocurrency and blockchain researcher Hamed Salehi believes that the document and overall government regulations are very significant for the local cryptocurrency community. &ldquo;Not only do they recognize cryptomining as an industry, but they effectively legitimize bitcoin and other cryptos, blocking other entities from completely prohibiting their use,&rdquo; he told Bitcoin Magazine. There were no regulations aimed specifically at cryptocurrencies in Iran until April 2018, when the Supreme Council of Anti-Money Laundering directed the central bank to publish a directive, barring all financial institutions from handling cryptocurrencies.&nbsp; Issued shortly after a currency crisis that was triggered by reimposition of unilateral United States sanctions, the directive was a misguided attempt at preventing capital flight that only led to mass confusion. While there were no laws banning use of cryptocurrencies, several entities including the cyber police have said that employing them is illegal. Then, in late January 2019, the central bank published a draft regulatory framework that proposed legalizing the use of cryptocurrencies and the establishment of licensed exchanges, but called for banning cryptocurrencies from being used as methods of payment inside the country. The framework has yet to be ratified, partly due to its many faults and shortcomings.&nbsp; The directive ratified by the cabinet in August 2019 did not outlaw cryptocurrency use and only warned people wishing to use them of the associated potential risks of capital loss. &ldquo;Before the [August] cabinet directive, anything having to do with cryptos carried the stigma of illicit activity,&rdquo; Salehi said. Cryptocurrency Miners Still Unhappy But while the new regulations legitimize cryptocurrencies and mining, the local community remains concerned about their ramifications for the fledgling industry. Some large-scale professional cryptocurrency miners are already moving their operations abroad to more hospitable neighboring destinations including Russia, Georgia, Kazakhstan, Armenia and even Iraq. They complain that the proposed electricity prices are irrationally high and coupled with other expenses &mdash; such as taxes, import tariffs and the other costs associated with operating a cryptocurrency mining farm that are already gravely high due to Iran&rsquo;s significantly weakened national currency &mdash; these could render their businesses obsolete. As ratified by the cabinet, the price of electricity offered to miners will be equal to the average rial price at which Iran exports its electricity to other nations, or to 70 percent of the average rial price at which the country ships off its natural gas. The Ministry of Energy does not disclose its electricity export prices to the public, but Salehi said that the price amounts to between five to seven cents per kilowatt/hour according to private estimates. &ldquo;Now there are rumors that the energy ministry is looking at a price of about 6,500 rials (around 5.5 cents) for eights months of the year and a stratospheric price of over 20,000 rials (above 17 cents) per kilowatt/hour for the remaining four warm months that see higher energy consumption,&rdquo; the researcher said. This is while neighboring countries offer rates that vary from 3.5 cents to 5 cents per kilowatt/hour, according to local research. Iranian miners previously used industrial-grade subsidized electricity that was usually priced under two cents per kilowatt/hour. The government acted to regulate them since it believed they were benefiting from cheap electricity at the expense of the government and putting a strain on the national power grid.&nbsp;&nbsp; &ldquo;I think if passed in their current form, the government regulations will mostly eliminate major private players and replace them with state-linked actors, many of whom still enjoy various forms of subsidies,&rdquo; Salehi said. This, he said, is particularly true since bitcoin&rsquo;s mining reward will be halved in less than one year. This has prompted professional cryptocurrency miners around the world to add a large number of new and more efficient devices to their farms to take advantage of the time they have until their operations are strained by the halving.&nbsp;&nbsp;&nbsp; &ldquo;A Losing Game&rdquo; Moreover, Salehi believes that the government is &ldquo;throwing itself into a losing game&rdquo; since its regulations run the risk of driving many would-be transparent and legitimate players underground. He warns that the new regulations could increasingly encourage the smuggling of cryptocurrency mining gear and prompt many people to each plug in a handful of devices at residential units illegally. Lastly, as ratified by the cabinet and the Iranian National Tax Administration, cryptocurrency miners can become exempt from paying taxes if they repatriate their foreign currency yields into NIMA, an online currency system run by the central bank that accepts foreign currency yields of exporters at a unique rate lower than the open market rate and provides importers with their required foreign currencies at that same rate.&nbsp; The cabinet&rsquo;s directive states that cryptocurrency miners will be obligated to sell their foreign currency yields at the NIMA rate but does not say that they can receive their required foreign currencies for imports at that same cheaper rate. The local cryptocurrency community sees this as another slight.

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Iran Cryptocurrency Mining Regulations Detailed

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The Iranian government’s recently ratified cryptocurrency mining regulations are so severe that they appear to be forcing large-scale miners to move their operations abroad.&nbsp;



Days after President Hassan Rouhani’s cabinet implemented a set of cryptocurrency mining regulations on August 4, 2019, reports of miners <a href="https://twitter.com/Asic_News/status/1162712024285110273">packing up their gear</a> to move started coming in.&nbsp;



Russia, Georgia, Kazakhstan, Armenia and even Iraq are among the top destinations deemed more hospitable to cryptocurrency mining by professional Iranian miners.



“I’ve been mining for years and I would always say ‘Iran,’ even to the Russians, but now I’m at a place where I say no to Iran if there are no changes,” an unidentified miner, who has allegedly moved to Irkutsk, Russia, said in a <a href="https://twitter.com/Asic_News/status/1164262461052264448">series of videos</a> published on social media.



In its regulations, the Iranian government finally recognized cryptomining as an industry after more than a year of back and forth. It also said mining is legal both inside and outside of cities, as well as in free and special trade zones, provided applicants obtain a permit from the Ministry of Industry, Mine and Trade.



However, regulators also stipulated that the price of electricity offered to miners will be equal to the average rial price at which Iran exports its electricity to other nations, or to 70 percent of the average rial price at which the country ships off its natural gas.



That is the most problematic part of the regulations, which largely nips the fast-growing mining industry in the bud, according to the local crypto community.



“We welcome the fact that the government took a step to regulate and recognized crypto mining as an industry, but the energy prices are in no way economical or competitive and will only lead to capital flight,” the head of the nonprofit Iran Blockchain Community (IBC) Sepehr Mohammadi told Bitcoin Magazine.



“Why should this industry be different than any other and charge its players at export electricity prices as if they are foreigners?” he asked.



<h2>Cryptomining: A Misunderstood Industry</h2>



There are many more factors at play than energy prices.



As industrial players, cryptominers are subject to taxes — that is, unless they repatriate their foreign currency yields and sell them in NIMA, an online currency system for exporters designed by the Central Bank of Iran.



Moreover, the government is in the process of legalizing imports of cryptomining equipment that have so far been smuggled into the country, mostly by sea from Dubai. When that happens, miners would have to pay an additional import tariff.



The final cost of mining equipment that reaches Iranian consumers is already much higher compared to global markets. Two contributing factors are that the goods are smuggled and Iran’s national currency is weakened.



Iran was afflicted by a major currency crisis that saw the rial plunge more than 60 percent in value after United States President Donald Trump unilaterally withdrew from the country’s nuclear deal with world powers in May 2018, imposing a “maximum pressure” campaign of harsh economic sanctions. While the rial has relatively stabilized and regained some lost ground in recent months, imported goods are now much more expensive than they were last year.



“I keep hearing officials say that crypto mining is an immensely lucrative industry, but they don’t see the dark side of it and how high the associated risks can run,” crypto and blockchain researcher Hojjat Abbasi told Bitcoin Magazine.



The expenses that are often overlooked by regulators, he added, include the short, effective life span of devices; changing values of cryptocurrencies and the U.S. dollar; network difficulty; and the high cost of employing a workforce that will effectively need to supervise mining farms all day long, often in remote locations.&nbsp;



“You simply cannot have a fully precise prediction of the future of this industry,” Abbasi said.



<h2>Lack of Regulation, Clarity</h2>



Iran’s crypto community is disappointed but not particularly surprised by the government’s approach to regulating cryptomining, even though it signifies a complete reversal of their situation.



Before the August 4 directive, a lack of regulation meant that miners would be able to use cheap, subsidized, industrial-grade electricity throughout most months of the year at a typical cost of around $0.01 per kilowatt-hour that, at times, could go even lower.&nbsp;&nbsp;



But various factions of the government, especially the Ministry of Energy, <a href="https://www.aljazeera.com/ajimpact/iran-cryptocurrency-miners-feeling-heat-summer-190628174746161.html">started cracking down</a> on miners at the start of summer, accusing them of putting an outsized strain on a power grid that had experienced regular power outages in previous years.



Thousands of mining devices have been confiscated in recent months on the grounds of being smuggled into the country and taking advantage of cheap electricity at the expense of the government. Most of them have yet to be returned to their private owners and it is unclear whether they will ever be returned.



<h2>A ‘Lose-Lose Situation’ for Cryptominers</h2>



Even after cryptomining was recognized by the government as an industry, authorities continued to send mixed signals to crypto enthusiasts.



Last week, the state-run IRNA <a href="https://www.irna.ir/news/83455395/%D9%85%D8%AA%D9%87%D9%85-%D9%81%D8%B9%D8%A7%D9%84-%D8%AF%D8%B1-%D8%B4%D8%A8%DA%A9%D9%87-%D8%A8%DB%8C%D8%AA-%DA%A9%D9%88%DB%8C%D9%86-%D8%AF%D8%B1-%D9%85%D9%87%D8%A7%D8%A8%D8%A7%D8%AF-%D8%B4%D9%86%D8%A7%D8%B3%D8%A7%DB%8C%DB%8C-%D8%B4%D8%AF">published a report</a> saying an unnamed individual was arrested with a single mining device in Mahabad, located in West Azerbaijan province. The suspect “confessed to being active in the bitcoin network during initial interrogations” and was handed over to the provincial judiciary, the news agency said.&nbsp;&nbsp;&nbsp;



IBC’s Mohammadi believes that if left in their current form, the government regulations will create a lose-lose situation for both the government and the private sector.&nbsp;



“We have cheap resources — some of which are wasted in transfer — that we can’t sell to the world due to U.S. sanctions,” he said. “And even if we could sell, it could take up to two years for the money to come back.”



So he believes it is highly misguided to restrict and drive away cryptominers who require no transfer infrastructures and can effectively turn electricity and gas into currencies that can be quickly cashed out.



<h2>National Consequences for Iran</h2>



The IBC is trying to lobby through the parliament and other entities to reform the regulations. If all fails, it will consider filing a formal complaint with the Administrative Court of Justice, Mohammadi said.



Abbasi, meanwhile, points out that power plants and cryptominers could be a perfect match. Power plants look for customers who have their money ready at hand, whose power consumption won’t fluctuate too much, and whose industry wouldn’t take too long to turn off during peak power consumption hours.



But the researcher believes a fixed electricity rate would be meaningless for an industry whose revenues are not predictable.



“I think crypto miners should be allowed to use the Iran Energy Exchange to be directly linked with power producers and get the prices that make sense for them at that particular time,” Abbasi said.



In addition to forcing cryptominers to consider options outside the country, the Iranian government’s new regulations would also drive many others to conduct their operations under the radar. Whether through prompting miners to secretly strike deals with power producers or encouraging people to plug in a handful of miners in their homes, the regulations signify a step backward in terms of transparency for the rising industry.



Lastly, the heavy-handed regulations will also deter potential foreign investors, many of whom were actually being <a href="https://www.coindesk.com/cheap-power-lures-crypto-miners-to-iran-but-its-not-as-easy-as-it-sounds">lured to Iran</a> by the cheap electricity prices last year.&nbsp;&nbsp;

Cryptocurrency mining is finally an industry in Iran, but for miners, there are simply too many caveats.

Heavy-Handed Regulations Run Cryptominers Out of Iran &raquo; Bitcoin Magazine Heavy-Handed Regulations Run...

Heavy-Handed Regulations Run Cryptominers Out of Iran &raquo; Bitcoin Magazine Heavy-Handed Regulations Run Cryptominers Out of Iran

The Iranian government&rsquo;s recently ratified cryptocurrency mining regulations are so severe that they appear to be forcing large-scale miners to move their operations abroad.&nbsp; Days after President Hassan Rouhani&rsquo;s cabinet implemented a set of cryptocurrency mining regulations on August 4, 2019, reports of miners packing up their gear to move started coming in.&nbsp; Russia, Georgia, Kazakhstan, Armenia and even Iraq are among the top destinations deemed more hospitable to cryptocurrency mining by professional Iranian miners. &ldquo;I&rsquo;ve been mining for years and I would always say &lsquo;Iran,&rsquo; even to the Russians, but now I&rsquo;m at a place where I say no to Iran if there are no changes,&rdquo; an unidentified miner, who has allegedly moved to Irkutsk, Russia, said in a series of videos published on social media. In its regulations, the Iranian government finally recognized cryptomining as an industry after more than a year of back and forth. It also said mining is legal both inside and outside of cities, as well as in free and special trade zones, provided applicants obtain a permit from the Ministry of Industry, Mine and Trade. However, regulators also stipulated that the price of electricity offered to miners will be equal to the average rial price at which Iran exports its electricity to other nations, or to 70 percent of the average rial price at which the country ships off its natural gas. That is the most problematic part of the regulations, which largely nips the fast-growing mining industry in the bud, according to the local crypto community. &ldquo;We welcome the fact that the government took a step to regulate and recognized crypto mining as an industry, but the energy prices are in no way economical or competitive and will only lead to capital flight,&rdquo; the head of the nonprofit Iran Blockchain Community (IBC) Sepehr Mohammadi told Bitcoin Magazine. &ldquo;Why should this industry be different than any other and charge its players at export electricity prices as if they are foreigners?&rdquo; he asked. Cryptomining: A Misunderstood Industry. There are many more factors at play than energy prices. As industrial players, cryptominers are subject to taxes &mdash; that is, unless they repatriate their foreign currency yields and sell them in NIMA, an online currency system for exporters designed by the Central Bank of Iran. Moreover, the government is in the process of legalizing imports of cryptomining equipment that have so far been smuggled into the country, mostly by sea from Dubai. When that happens, miners would have to pay an additional import tariff. The final cost of mining equipment that reaches Iranian consumers is already much higher compared to global markets. Two contributing factors are that the goods are smuggled and Iran&rsquo;s national currency is weakened. Iran was afflicted by a major currency crisis that saw the rial plunge more than 60 percent in value after United States President Donald Trump unilaterally withdrew from the country&rsquo;s nuclear deal with world powers in May 2018, imposing a &ldquo;maximum pressure&rdquo; campaign of harsh economic sanctions. While the rial has relatively stabilized and regained some lost ground in recent months, imported goods are now much more expensive than they were last year. &ldquo;I keep hearing officials say that crypto mining is an immensely lucrative industry, but they don&rsquo;t see the dark side of it and how high the associated risks can run,&rdquo; crypto and blockchain researcher Hojjat Abbasi told Bitcoin Magazine. The expenses that are often overlooked by regulators, he added, include the short, effective life span of devices; changing values of cryptocurrencies and the U.S. dollar; network difficulty; and the high cost of employing a workforce that will effectively need to supervise mining farms all day long, often in remote locations.&nbsp; &ldquo;You simply cannot have a fully precise prediction of the future of this industry,&rdquo; Abbasi said. Lack of Regulation, Clarity. Iran&rsquo;s crypto community is disappointed but not particularly surprised by the government&rsquo;s approach to regulating cryptomining, even though it signifies a complete reversal of their situation. Before the August 4 directive, a lack of regulation meant that miners would be able to use cheap, subsidized, industrial-grade electricity throughout most months of the year at a typical cost of around $0.01 per kilowatt-hour that, at times, could go even lower.&nbsp;&nbsp; But various factions of the government, especially the Ministry of Energy, started cracking down on miners at the start of summer, accusing them of putting an outsized strain on a power grid that had experienced regular power outages in previous years. Thousands of mining devices have been confiscated in recent months on the grounds of being smuggled into the country and taking advantage of cheap electricity at the expense of the government. Most of them have yet to be returned to their private owners and it is unclear whether they will ever be returned. A &lsquo;Lose-Lose Situation&rsquo; for Cryptominers. Even after cryptomining was recognized by the government as an industry, authorities continued to send mixed signals to crypto enthusiasts. Last week, the state-run IRNA published a report saying an unnamed individual was arrested with a single mining device in Mahabad, located in West Azerbaijan province. The suspect &ldquo;confessed to being active in the bitcoin network during initial interrogations&rdquo; and was handed over to the provincial judiciary, the news agency said.&nbsp;&nbsp;&nbsp; IBC&rsquo;s Mohammadi believes that if left in their current form, the government regulations will create a lose-lose situation for both the government and the private sector.&nbsp; &ldquo;We have cheap resources &mdash; some of which are wasted in transfer &mdash; that we can&rsquo;t sell to the world due to U.S. sanctions,&rdquo; he said. &ldquo;And even if we could sell, it could take up to two years for the money to come back.&rdquo; So he believes it is highly misguided to restrict and drive away cryptominers who require no transfer infrastructures and can effectively turn electricity and gas into currencies that can be quickly cashed out. National Consequences for Iran. The IBC is trying to lobby through the parliament and other entities to reform the regulations. If all fails, it will consider filing a formal complaint with the Administrative Court of Justice, Mohammadi said. Abbasi, meanwhile, points out that power plants and cryptominers could be a perfect match. Power plants look for customers who have their money ready at hand, whose power consumption won&rsquo;t fluctuate too much, and whose industry wouldn&rsquo;t take too long to turn off during peak power consumption hours. But the researcher believes a fixed electricity rate would be meaningless for an industry whose revenues are not predictable. &ldquo;I think crypto miners should be allowed to use the Iran Energy Exchange to be directly linked with power producers and get the prices that make sense for them at that particular time,&rdquo; Abbasi said. In addition to forcing cryptominers to consider options outside the country, the Iranian government&rsquo;s new regulations would also drive many others to conduct their operations under the radar. Whether through prompting miners to secretly strike deals with power producers or encouraging people to plug in a handful of miners in their homes, the regulations signify a step backward in terms of transparency for the rising industry. Lastly, the heavy-handed regulations will also deter potential foreign investors, many of whom were actually being lured to Iran by the cheap electricity prices last year.&nbsp;&nbsp;

Heavy-Handed Regulations Run Cryptominers Out of Iran » Bitcoin Magazine Heavy-Handed Regulations Run Cryptominers Out of Iran

Maziar Motamedi

State Document Reveals Details of Iran’s Cryptocurrency Mining Regulations

Heavy-Handed Regulations Run Cryptominers Out of Iran