IRGC’s Unlicensed Crypto Mining in Iran: How the Guard Exploits Power

When Iran’s economy was squeezed by tightening sanctions, the IRGC cryptocurrency mining operation quietly grew into a massive, state‑backed cartel that guzzles electricity and fuels the regime’s cash flow. The story isn’t about hobbyists or start‑ups; it’s about a military‑industrial complex that turned illegal Bitcoin farms into a strategic weapon against external pressure.

Sanctions, Power Shortages, and the Crypto Hook

International sanctions in the late 2010s cut off Iran’s access to traditional dollar channels. Iran a middle‑east nation under U.S. and EU financial restrictions needed an alternative way to move value. Cryptocurrency offered exactly that: direct, peer‑to‑peer transfers that bypass banks and hide the origin of funds.

At the same time, the country faced a chronic energy crisis. Power outages were already common, and the grid’s inefficiencies left a huge amount of subsidized electricity idle. The regime recognized a perfect match - cheap, abundant power paired with a digital asset that could circumvent sanctions.

The IRGC’s Strategic Takeover

IRGC the Islamic Revolutionary Guard Corps, Iran’s powerful paramilitary and economic organization entered the crypto arena around 2019‑2020 under direct orders from Supreme Leader Ali Khamenei Iran’s supreme leader who oversees the IRGC. The goal was clear: turn the nation’s electricity surplus into Bitcoin revenue.

Key to the plan was partnering with foreign firms, especially Chinese investors who supplied mining hardware and technical know‑how. The most visible example is the Rafsanjan Bitcoin farm a 175‑megawatt mining facility in Kerman Province. Officially presented as a joint venture, the farm sits inside a special economic zone guarded by IRGC forces and receives electricity at near‑zero cost.

Scale: Numbers That Shock

Estimates suggest Iran operates roughly 180,000 mining devices ASIC miners used for Bitcoin production. Private miners own about 80,000 units; the remaining 100,000 are believed to be under IRGC‑linked entities. This translates to an estimated 10-12% of the world’s Bitcoin hash rate coming from Iranian soil, according to blockchain analytics firms.

These machines sit in facilities owned by a mix of military‑run companies, the charitable trust Astan Quds Razavi a massive bonyad supervised by the Supreme Leader, and several lesser‑known enterprises all reporting to the Guard. Their power consumption rivals that of a small city, often leading to rolling blackouts in nearby towns.

Why Private Miners Can’t Compete

Legally, Iran recognized crypto mining in 2019, handing out licenses through the Ministry of Industry, Mines and Trade the government body that issues mining permits. But licensed miners face steep electricity tariffs and must sell their output to the Central Bank of Iran (CBI) the country’s monetary authority at a government‑set rate. The net profit margin barely covers operating costs.

In contrast, IRGC‑backed farms receive power free of charge, enjoy armed protection, and can bypass tax checks entirely. When the parliament in 2022 quietly allowed the military to build private power plants, the Guard gained its own dedicated grid, further insulating its operations from civilian oversight.

Economic and Social Fallout

The energy drain is palpable. Energy Minister Ali Abadi a former IRGC commander turned minister publicly called unauthorized crypto mines “an ugly theft,” yet his own background fuels speculation that the state won’t crack down on its own troops.

Households report up to six hours of daily outages, factories shutter for days, and hospitals rely on costly diesel generators. All the while, the Guard’s Bitcoin farms keep churning out coins that are quickly moved to offshore wallets, often linked to proxy groups in the region.

Regulatory Tug‑of‑War

In December 2024, the CBI attempted to curb crypto flow by blocking all domestic‑to‑foreign currency conversions on internet platforms. By January 2025, the bank introduced a government‑run API that grants privileged exchanges full access to user data, effectively turning the market into a surveillance zone. However, the IRGC sidesteps these controls by moving coins through private wallets and overseas exchanges, a loophole that remains largely untouched.

Popular local exchange Nobitex Iran’s largest domestic crypto exchange continues to operate under strict limits, while many Iranians resort to VPNs and foreign platforms to trade.

International Reaction

U.S. Treasury and Israeli intelligence have singled out Bitcoin addresses linked to the Guard, freezing assets and sanctioning front companies. Yet the decentralized nature of blockchain means the funds can be recirculated through mixers, making enforcement a cat‑and‑mouse game.

Beyond sanctions, the global crypto community is watching Iran as a case study of how state actors can weaponize digital assets to fund conflict and evade financial isolation.

Comparison: Licensed vs Unlicensed Mining in Iran

Looking Ahead: What Might Change?

Three scenarios dominate the near‑future outlook:

1. Intensified sanctions. If the U.S. and EU expand crypto‑focused penalties, the Guard could double down on covert mining, further degrading the civilian power grid.
2. Domestic crackdown. A genuine political shift could see the parliament empower civilian regulators to seize illegal farms, but this would require dismantling the Guard’s entrenched energy assets.
3. Technological disruption. A shift to energy‑efficient proof‑of‑stake blockchains could render Bitcoin farms less profitable, potentially lowering the incentive for large‑scale mining.

Until one of these forces takes hold, Iran’s energy crisis and crypto‑driven cash flow will likely remain intertwined.