Associated Press Report on Power Outages in Iran: People's Lives Disrupted

On Friday, December 14, the Associated Press reported that ongoing power outages in Iran over recent months have disrupted "the lives and businesses of people." The news agency noted that multiple factors such as mismanagement, reduced energy reserves, ongoing drought, budget deficits, and sanctions related to the Islamic Republic's nuclear activities likely contribute to the power outages, while some suspect that cryptocurrency mining may also play a role. According to the report, the value of Bitcoin reached its highest point following Donald Trump's victory in last month's U.S. presidential election, surpassing $100,000 for the first time last week. This increase in Bitcoin's price has led some to suspect that organized cryptocurrency mining, due to its significant electricity consumption, has contributed to the recent outages in Iran. The agency referenced comments by Mostafa Rajabi, CEO of Iran's state electricity company, who stated this summer that "unfortunately, some opportunistic and exploitative individuals use subsidized electricity, public networks, and other unauthorized resources for cryptocurrency mining." Additionally, on November 12, several social media users reacted to the electricity rationing, which the Islamic Republic government called "the beginning of planned outages," claiming that these outages followed the rise in Bitcoin prices and aimed to allocate electricity for operating cryptocurrency mining farms. In part of the Associated Press report, citing Masih Alavi, CEO of a licensed mining company called "Vira Miner," it was noted that "determining the energy consumption by mining is challenging, especially since miners use virtual private networks that conceal their locations." The news agency pointed out that about three years ago, an estimate indicated that Iran processed "one billion dollars in Bitcoin transactions," and added that with the rise in Bitcoin prices, this value has likely increased alongside the power outages in Iran. According to the Associated Press, the U.S. Treasury Department and Israel state that the Islamic Revolutionary Guard Corps relies on cryptocurrencies to finance proxy militant groups in the Middle East, and therefore may be involved in cryptocurrency mining farm activities. Earlier, two U.S. senators, Elizabeth Warren and Angus King, requested a deeper investigation into the Islamic Republic's cryptocurrency activities in a letter to senior Biden administration officials, expressing concern that the Iranian government uses these cryptocurrencies for "money laundering, financing terrorism, and evading sanctions." They asked the U.S. Treasury and Defense Secretaries, as well as the National Security Advisor, to clarify how much revenue the Iranian government has earned from cryptocurrency production since 2021 and requested details on how the Islamic Republic uses this money for military activities or supporting terrorist groups. The two senators pointed out that the Iranian government uses cryptocurrencies to circumvent energy sector sanctions and has turned to cryptocurrency mining, an energy-intensive activity, instead of exporting oil, estimating that in 2021, Iran was among the top eight countries in cryptocurrency production, mining 7% of the world's Bitcoin.