More than 7,000 mining machines have been confiscated by the Iranian authorities at an illegal crypto mining farm operating in the country's capital, Tehran.

According to a report by Iranian state media, the Islamic Republic News Agency (IRNA), the raid is part of efforts aimed at stopping illegal crypto mining in the country.

The Tehran police chief Hossein Rahimi said the authorities have also found 3,000 crypto miners across Tehran in the last 48 hours after the police raided 50 locations.

However, he said that the seizure of the 7,000 mining machines is the largest seizure of cryptocurrency mining machines to date. He added that crypto mining has made a significant drain on the country’s energy usage so far.

The news comes in the wake of the Iranian government’s recent suspension of crypto mining. The ban would last till September 2021.

The government banned crypto mining for almost four months due to the frequent power blackouts. The ban is a part of efforts aimed at reducing the energy shortage which officials blamed on overwhelming high electricity demand over the summer.

Bitcoin is created through a process known as mining, where computers compete to solve complex mathematical problems. The process is highly energy-intensive, often relying on electricity generated by fossil fuels, which are abundant in Iran.

Before the crackdown on miners, crypto mining was officially recognized as a legal industry.

Miners in the country are required to obtain an operating license from the Ministry of Industries and pay their electricity bills based on export rates. However, many miners have been operating in Iran without obtaining a license.

Last month, Iran’s ministry of energy disclosed that crypto miners have been using household electricity to mine Bitcoin to bypass paying higher tariffs.

The ministry declared that such illegal miners who are caught would pay heavy fines. The police recently caught four miners illegally using household electricity at a Pakdasht home in the southeast of the country’s capital.

Iran has accepted crypto mining in recent years, offering cheap power and requiring miners to sell their bitcoins to the central bank. The prospect of cheap state-subsidized power has attracted miners, particularly from China, to Iran.

The increase in the mining of crypto in Iran has helped the country earn money in crypto-assets and deal with issues such as trade restrictions.

These funds are used for payment settlement as the authorities allow cryptocurrencies mined in Iran to be used to pay for imports of authorized goods. The government was using crypto to sidestep sanctions.

According to Elliptic, the electricity being used by the miners in Iran is the equivalent of approximately 10 million barrels of crude oil each year, or four percent of total Iranian oil exports in 2020.

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