Unlicensed Crypto Mining in Iran: How the IRGC Controls the Nation's Power and Evades Sanctions

Iran is one of the world’s top producers of Bitcoin-not because its people are tech-savvy entrepreneurs, but because the Islamic Revolutionary Guard Corps (IRGC) is stealing electricity to run massive mining farms while millions of households go without power.

How the IRGC Took Over Crypto Mining

In 2019, Iran officially legalized cryptocurrency mining. On paper, it looked like a smart move: a way to earn foreign currency when global sanctions choked off traditional banking. But in practice, the law became a cover for the IRGC to seize control of the entire industry.

The IRGC didn’t just get involved-they built a monopoly. They set up mining farms inside military bases and special economic zones, where they get electricity for free or at a fraction of the cost regular citizens pay. These aren’t small operations. One mining complex in Rafsanjan, Kerman Province, alone uses 175 megawatts of power-enough to light up a small city. And it’s not alone. Experts estimate that up to 100,000 of Iran’s 180,000 active mining devices are controlled by IRGC-linked entities.

These aren’t just computers running in basements. They’re industrial-scale operations filled with ASIC miners-specialized hardware that eats electricity like a furnace. Each machine runs 24/7, generating Bitcoin that gets funneled into accounts controlled by the IRGC. The money doesn’t go to the Iranian economy. It doesn’t pay for hospitals or schools. It funds weapons, drones, and proxy militias across the Middle East.

The Energy Theft Crisis

While the IRGC runs its mining farms on subsidized or stolen power, ordinary Iranians face daily blackouts. In Tehran, families wait hours for the electricity to return so they can cook dinner or charge their phones. Factories shut down. Refrigerators spoil food. Hospitals rely on generators that cost more than they can afford.

Energy Minister Ali Abadi-who used to be an IRGC commander-called unlicensed mining “an ugly and unpleasant theft.” His words were rare, but they rang hollow. He didn’t shut down the IRGC’s mines. He didn’t even investigate them. His statement was a distraction, not a solution.

The truth is, the IRGC doesn’t need to hide. They don’t pay bills. They don’t fear audits. They have their own power lines, built with state funds and protected by armed guards. In 2022, Iran’s parliament passed a law allowing the military to build private power plants. That law didn’t help the public. It helped the IRGC mine more Bitcoin.

How Sanctions Made Crypto a Weapon

International sanctions have starved Iran of access to global finance. Banks won’t process its transactions. Oil exports are capped. The rial has lost over 80% of its value since 2018.

Cryptocurrency became Iran’s workaround. Bitcoin doesn’t need a bank. It doesn’t need SWIFT. It moves directly from wallet to wallet, across borders, with no middleman. The IRGC didn’t just use crypto to survive-they turned it into a weapon.

U.S. Treasury and Israeli intelligence agencies have tracked Bitcoin wallets linked to IRGC operations. These wallets are used to pay for drones in Yemen, missiles in Syria, and fighters in Iraq. Every Bitcoin mined in Iran’s secret farms is a bullet fired at civilians in other countries.

The regime doesn’t care about the global rules. They see blockchain not as technology, but as a loophole. And they’ve exploited it better than anyone else.

The Two-Tiered System

There are two kinds of crypto miners in Iran: those who follow the rules, and those who don’t.

Licensed miners have to pay high electricity rates and sell all their Bitcoin to the Central Bank of Iran at fixed prices. Many of them went out of business. Some say they were forced out by pressure from IRGC-linked competitors.

Meanwhile, the IRGC and its allies-like the Astan Quds Razavi foundation, a massive religious trust controlled by Supreme Leader Khamenei-operate with total immunity. They mine without paying, without reporting, without consequences.

It’s not corruption. It’s institutionalized theft.

What the Government Is Doing (and Not Doing)

In December 2024, Iran’s Central Bank blocked all domestic cryptocurrency exchanges. On the surface, it looked like a crackdown. But by January 2025, they quietly reopened a handful of exchanges-only this time, they built their own API system that gives them full access to every transaction.

They didn’t want to stop crypto. They wanted to control it.

Now, Iranians can still trade Bitcoin, but only through government-approved channels. The IRGC still mines in the shadows. The people still lose power. And the regime still profits.

Even when citizens use VPNs to access foreign exchanges like Nobitex, they’re playing a dangerous game. The government tracks their activity. They know who’s trading. They know how much. But they don’t act against the miners who are stealing the country’s energy.

Why This Matters Beyond Iran

This isn’t just Iran’s problem. It’s a warning.

If a state can weaponize cryptocurrency to bypass sanctions, steal energy, and fund violence, then the same model could be copied elsewhere. The tools are cheap. The infrastructure is simple. The rewards are huge.

Countries under sanctions-North Korea, Venezuela, Russia-are watching closely. They see how Iran turned mining into a state-run revenue stream. They see how the IRGC got away with it.

The global financial system was built on trust. Banks, regulators, audits. But crypto, when controlled by authoritarian regimes, breaks that trust. It turns anonymity into a shield for crime.

What’s Next?

Iran’s energy crisis isn’t getting better. Winter is coming. Demand for electricity is rising. The IRGC’s mining farms are expanding.

There’s no sign the regime will stop. No international pressure has forced them to. No sanctions have hit their mining profits hard enough. The U.S. has targeted wallets. Israel has tracked transactions. But the hardware keeps running. The lights keep going out.

The only solution would be to cut off the power. But that’s not something foreign governments can do without risking civilian suffering. And Iran’s own people? They’re too powerless to stop it.

For now, the IRGC keeps mining. The people keep waiting. And the world keeps pretending this isn’t happening.