• Sat. Mar 2nd, 2024

Iran’s Ban on Crypto Mining Continues

Jun 1, 2021

Crypto mining was immediately banned when the Head of the Iranian Government ordered the imposition of the ban. According to the President’s Office, the ban will continue to remain in place by 22nd September 2021 and can be extended, if felt necessary.

Iranian President Mr. Hassan Rouhani has ordered the banning of crypto mining in the country. The announcement of the ban was made by the President in a Presidential address which was broadcasted live on 26th May 2021. As per President’s address, the ban will be automatically lifted on 22nd September 2021. However, if the President is of the view that the ban should be prolonged then it can be extended for a further period.

The ban has been implemented as the people in various parts of Iran came out in the streets and protested against the regime. The protesters were outraged because of power outages for several hours a day which became an everyday norm for many days. The Government on the other hand blamed the electricity crisis on the mining industry which the government itself had legalized in the recent past.

Before the ban, the warning was also given to crypto miners that when hot summer days will come, Government will close some mining activities. However, the Government did not say that it will completely ban crypto mining activities. Because crypto mining is a legal activity in Iran, therefore, being aggrieved, crypto miners can invoke the writ jurisdiction of the court. It is however unlikely that in such a situation the Courts in Iran will render any favorable verdict to crypto miners.

According to Elliptic, around 4.5% of the new Bitcoins are mined in the mining centers of Iran. With crypto mining, Iran was also able to collect huge revenues and in fact, was earning millions of dollars worth of digital assets. This revenue and digital assets were being utilized by the Iranian Government for importing goods from other countries. Otherwise, several trade restrictions and sanctions have been imposed upon Iran by multiple countries including the US.

The Government earlier also took an initiative through which local miners were asked to sell their Bitcoins directly to the Bank of Iran. Similarly, in the past month, the Government allowed crypto exchanges and financial institutions to utilize crypto assets for import purposes. However, the action of banning crypto mining is somewhat a wrong policy decision for the country. It may have been imposed on a temporary basis and once the protesters are silent, crypto mining might be reinstated.

But the Government’s actions are vibrantly clear as it is blaming the mining industry in the first place. Yet there were of course some miners who were using the electricity illegally. But penalizing everyone for a handful of wrongdoers is illegal in the eyes of law. Some of the miners have been engaging attorneys for settling the dispute in Courts. But the ban is continuing in full force.

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