In recent weeks, the tension between Iran and the US has escalated. The US military targeted and eliminated high-ranking Iranian personnel leading to the tensions between the two countries. To escape sanctions, Iran turned to cryptos trying to end the US dollar’s dominance.
In the latest developments, Iran’s Ministry of Industries, Mining, and Trade has reportedly issued at least 1,000 crypto mining licenses. These licenses were awarded to domestic operations. A January 24 Amir Hossein Saeedi Nai report published by Iran’s Banking and Economic System Reference Media (IBENA) informed the public of the total number of licenses issued.
IBENA is a member of the Information and Communications Technology (ICT) Guild Organization’s blockchain commission. Nai explained that all entrepreneurs must apply for a license before they launch any mining operations within the country. In that context, he confirmed that the government had issued at least 1,000 permits for now.
Many mining farms have now launched their operations. If the local mining industry can function to its full capacity, Nai estimates that it would bring in a staggering $8.5 billion into the local economy.
How Crypto Mining Can Benefit Iran’s Economy
Sanctions from the US and its western countries’ allies have almost crippled Iran’s economy. The country needs foreign exchange volumes. Digital currencies can help facilitate trade while simultaneously importing foreign currency that can be used to bypass economic sanctions.
Currently, the ICT Guild Organization is striving to improve Iran’s crypto mining conditions. The government hopes that the local mining activity will spring back to life as electricity rates drop. This development may enhance cooperation between gas-burning power plants and local crypto miners.
Today, Iran boasts the lowest energy prices globally, standing at $0.007 per kilowatt-hour. But, recent blackouts and energy shortages have made regulators take a more active management role in the country’s power supplies. Hence, authorities have taken a strict approach to crypto mining.
The increased crypto mining activity in Iran pushed the government to raise its electricity tariffs for the sector from $0.007 to $0.07 per hour. That rise represents the same price as electricity exports. Iranian police arrested an individual who was smuggling in unregistered crypto mining machines in August 2019.
In November 2019, Iranian authorities offered a bounty to anybody who exposed any illegal mining operations within the country.
Hamas Turn To Bitcoin Fundraising Action
Even as the government encourages investors to enter the crypto industry, criminal elements are also turning to the nascent sector. Hamas militant group is reportedly increasing its Bitcoin fundraising activities. The group has turned to bitcoin due to decreased resources and a recent rejection by Iran to offer the group financial support.
The group’s activity was documented in from the IDC’s International Institute for Counter-Terrorism (ICT), as reported on January 19 by the Jerusalem Post. According to ICT findings, thorough reviews of a BTC wallet address (1LaNXgq2ctDEa4fTha6PTo8sucqzieQctq) show that it served:
“A seemingly legitimate financial website by the name of cash4ps”
The wallet is allegedly owned by the Iran-affiliated “al-Nasser Salah al-Deen Brigades, the military branch of the Palestinian Popular Resistance Committees (PRC). Through the wallets, Brigades can send and receive funds from the Gaza strip while maintaining a degree of anonymity to beneficiaries and donors.
Further research reveals that the Bitcoin wallet address is linked to a company that is identified as operating an account that is registered at the Islamic National Bank (INB). The US Treasury blacklisted the bank in 2010 since Hamas, a terrorist organization controls it. INB has also been declared illegal by the Palestinian Capital Market Authority and the Palestinian Monetary Authority.
According to an ICT report, the total transaction volume recorded in the wallet had reached 3,370 bitcoins by December 1, 2019, translating to more than $24 million. The company’s two physical addresses were traced back to the Gaza strip. Representatives advise the US government to designate all he identified accounts as terrorist-affiliated entities.
Countries should implement more severe regulatory and legal measures for the Bitcoin exchanges that cooperate with international allies to support these activities to curb the crypto activities of this terrorist group.
Hamas’ financial isolation comes from its partial or full classification as a terrorist organization by different international blocs and countries. After ruling the Gaza strip since 2007, the group consists of a social service arm “Dawah” and a militant faction “Izz ad-Din al-Qassam Brigades.”
Brigades initiated this year’s Bitcoin fundraising appeal. However, Turkey, Russia, and China do not consider the Hamas group as a terrorist entity. Purportedly, the group has availed itself of Bitcoin contributions according to reports by Elliptic and others.