Unlicensed Crypto Mining in Iran: How the IRGC Controls the Crypto Boom

On any given night in Tehran, families huddle under blankets as the lights go out. The power grid is overloaded. Factories shut down. Hospitals run on generators. Meanwhile, thousands of high-powered computer rigs hum silently inside military bases, mining Bitcoin - and no one dares to turn them off.

How a Sanctioned Nation Turned Mining Into a State Secret

When international sanctions cut Iran off from global banking systems in the 2010s, the country needed a new way to move money. Bitcoin wasn’t meant to be a lifeline for a regime under siege. But it became one anyway.

By 2019, the Islamic Revolutionary Guard Corps (IRGC) had quietly taken over Iran’s cryptocurrency mining industry. Not through legal channels. Not through competition. But by seizing control of the country’s electricity supply - the one resource Iran still had in abundance.

The IRGC didn’t start mining because they were tech-savvy. They did it because they could. They had the weapons, the infrastructure, and the authority to ignore the rules that applied to everyone else.

Iran’s government officially legalized cryptocurrency mining in 2019, but the licensing system was a trap. Private miners had to pay sky-high electricity rates and sell their Bitcoin to the Central Bank of Iran at fixed prices. Most went bankrupt. Meanwhile, IRGC-linked operations, hidden inside military zones and religious foundations, paid nothing. Or worse - they just stole power.

The 175-Megawatt Mine That Lights Up Nothing

In Rafsanjan, a city in southern Iran, a massive Bitcoin mining farm sits behind high walls and armed guards. It’s officially a joint venture with Chinese investors. In reality, it’s run by an IRGC-controlled company. It uses 175 megawatts of electricity - enough to power a small city.

That’s not a typo. 175 megawatts. Enough to light up 150,000 homes. But those homes? They go dark for hours every day.

This isn’t an exception. It’s the norm. Experts estimate that between 80,000 and 100,000 mining rigs operate in Iran. Private miners hold about 80,000. The rest - likely 100,000 or more - belong to state actors. That means over half of all mining in Iran is unlicensed, hidden, and protected by the military.

These aren’t hobbyists with a few rigs in their garages. These are industrial-scale operations. Thousands of ASIC miners, stacked in rows, consuming electricity like water. Each machine runs 24/7, generating heat that can melt plastic. Cooling them requires even more power. And none of it is billed.

How the IRGC Gets Away With It

The IRGC doesn’t just use stolen electricity. They built their own power grid.

In 2022, Iran’s parliament passed a law allowing the military to construct private power plants and transmission lines. Suddenly, the IRGC could bypass the national grid entirely. They tapped into public lines. They rerouted electricity meant for factories and schools. They built their own substations.

And they didn’t need permission. They didn’t need to pay. They didn’t even need to hide. They just did it.

The regime calls these operations “legal mining.” But the Ministry of Industry, Mines, and Trade - the agency that’s supposed to regulate mining - has no access to these sites. No audits. No inspections. No invoices.

Even the Energy Minister, Ali Abadi, admitted the theft. He called it “putting a hand in others’ pockets.” But Abadi used to be an IRGC commander. He once led the same organization now running these mines. His words ring hollow.

Why Bitcoin? Why Now?

Bitcoin isn’t just digital money. It’s digital cash that can’t be frozen. It can’t be blocked. It doesn’t need banks.

When Western sanctions cut Iran off from SWIFT, the global banking network, the IRGC needed a way to pay for weapons, drones, and militias across the Middle East. Bitcoin became the answer.

Blockchain analytics firms have traced Bitcoin wallets linked to IRGC operations. These wallets fund Hezbollah in Lebanon. They pay for drone parts in Yemen. They buy missile components from North Korea.

The U.S. Treasury and Israeli intelligence have both targeted these wallets. But shutting them down is like trying to plug a leak in a dam. Every time one is frozen, another pops up. The IRGC uses offshore exchanges, mixers, and peer-to-peer trades to launder the crypto into usable cash.

And here’s the twist: Iran’s own Central Bank now runs a government-approved crypto exchange. In January 2025, they quietly unblocked transactions between Bitcoin and the Iranian rial - but only through their own system. Every trade is monitored. Every wallet is tracked. The state doesn’t want to stop crypto. It wants to own it.

The Human Cost of a Military Crypto Empire

In cities like Shiraz and Mashhad, people wait hours for the lights to come back on. Children study by candlelight. Refrigerators spoil food. Dialysis machines shut down.

Private miners who tried to operate legally were crushed. They paid 10 times the rate the IRGC paid. They were forced to sell their Bitcoin to the government at a loss. Many gave up. Others went underground - and got arrested.

Meanwhile, the IRGC’s mining farms keep running. They’re not just profitable. They’re essential to the regime’s survival.

The energy crisis isn’t accidental. It’s engineered. By letting the IRGC steal power, the state ensures that no one else can use crypto to escape sanctions. Only the regime gets to play.

What’s Next? The Cat-and-Mouse Game

Iranian citizens still use crypto. They just can’t do it legally. They use VPNs to access foreign exchanges like Nobitex. They trade Bitcoin for dollars on Telegram. They send money to family abroad through crypto bridges.

But every time they do, they risk being tracked. The government’s API system logs every transaction. If you’re caught using crypto without permission, you could lose your phone. Your bank account. Your freedom.

The IRGC doesn’t care about regulation. They care about control. They don’t want to ban crypto. They want to be the only ones who can mine it. The only ones who can cash out. The only ones who can profit.

And for now, they’re winning.