Senators Warn on Iran’s Bitcoin Mining

US Senators Elizabeth Warren (D-Mass.) and Angus King (I-Maine) issued a stern warning about the potential ramifications of Iran’s burgeoning Bitcoin mining industry. In a detailed letter addressed to key members of the Biden administration, they highlighted how Iran’s crypto mining activities could potentially undercut the effectiveness of economic sanctions.

The senators pointed out that crypto mining offers Iran an alternative revenue stream, which it allegedly uses to facilitate imports and exports, move funds across borders, and even support organizations like Hamas, which the letter describes as terrorist. This capability, according to the senators, poses a direct threat to US national security.

Drawing on numerous sources, the letter underscores Iran’s significant role in the global Bitcoin market. It was estimated that in 2021, Iran accounted for as much as 7% of worldwide Bitcoin production, generating approximately $1 billion in mining revenue. This substantial involvement underscores the scale at which Iran has adopted cryptocurrency technologies to mitigate the impact of sanctions.

Furthermore, the letter reveals a government mandate requiring Iranian crypto miners to sell their mined Bitcoin to the Iranian central bank. The central bank then purportedly uses these assets to manage the country’s imports and exports, thereby circumventing traditional financial channels that are more susceptible to international sanctions.

The communication was directed at Secretary of Defense Lloyd Austin, Secretary of the Treasury Janet Yellen, and National Security Advisor Jake Sullivan. The senators inquired about the steps the administration is taking to address Iran’s potential evasion of sanctions through its involvement in cryptocurrency mining.

Concluding their correspondence, Senators Warren and King posed critical questions regarding the scale of Iran’s Bitcoin mining revenues since 2021, its methods of laundering these funds, and its financial support to alleged terrorist organizations. They requested a response from the administration by May 16, emphasizing the urgency of understanding and potentially curtailing these activities.