Iran Now Accepts Cryptocurrency Mining As A Legitimate Industry, Local Sources Report

  • Iran's government has reportedly accepted cryptocurrency mining as a legitimate industry.
  • This news comes shortly after Iran revealed that it has completed the development of its national cryptocurrency.
  • Presumably, only government-approved organizations may conduct cryptocurrency mining in Iran since the nation has not yet clarified its stance regarding cryptocurrencies.

IBENA, an Iranian news agency focusing on banking and local economic developments, recently revealed that cryptocurrency mining has been approved as an industry in Iran.

Over the last few months there have also been reports of Iran working on developing a state-backed digital currency.

Clarified Stance On Cryptos Expected By End Of September

According to Abolhassan Firouzabadi, the Secretary of Iran’s Supreme Council of Cyberspace, the National Cyberspace Center has been working closely with the nation’s central bank on managing crypto-related activity in the country.

The Iranian government’s announcement noted that the nation’s central financial institution will serve as a “trustee in [the] foreign exchange area” and as a “decision-making authority” in outlining the framework and policies for the “trade and participation of [local cryptocurrency] startups.”

Iran’s central bank is expected to announce its “definitive” stance on cryptocurrencies toward the end of the month. Firouzabadi also confirmed that the country’s national cryptocurrency will be used as “a financial transaction instrument with Iran’s trade partners”, in order to bypass US-led economic sanctions on the so-called rogue state.

Crypto Mining Officially Approved As Industry

Moreover, IBENA provided important details regarding the acceptance of crypto mining as a legitimate industry in Iran. The local news agency, which is reportedly affiliated with the central bank of Iran, wrote,

“[cryptocurrency] mining like bitcoin has been accepted as an industry in the government and all related organizations to the mining such as Ministry of Communications and Information Technology, Central Bank, Ministry of Industry, Mining and Trade, Ministry of Energy, as well as Ministry of Economic Affairs and Finance have agreed it, but the final policy for legislating it hasn't been declared yet.”

IBENA (Iranian news outlet)

Presumably, only government-approved agencies and organizations might be authorized to engage in mining digital currencies, considering that local citizens are still prohibited from engaging in crypto-related activity. However, there have still been reports of Iranian residents who are trading and investing in cryptocurrencies.

In most countries that have banned or restricted cryptocurrency trading such as India and China, local crypto traders have found ways to buy and sell cryptos mainly by using peer-to-peer (P2P) or over-the-counter (OTC) trading options.

Weekly Newsletter

BitMEX Slammed as Roubini Raises the Stakes in War Against Crypto

Neil Dennis

Every new concept has its critics and there's none so vehemently opposed to cryptocurrencies as New York University academic Nouriel Roubini, who has just taken his most vicious swipe yet at the emerging asset class.

In an essay entitled "The Great Crypto Heist", published this week on the website Project Syndicate, the NYU Stern Business School professor accuses financial regulators of "being asleep at the wheel" while an army of unregulated exchanges, propagandists and scammers commit "rampant fraud and abuse".

He singles out crypto-derivatives exchange BitMEX as being a particular threat to retail investors. Roubini clashed earlier this month with Arthur Hayes, the chief executive of BitMEX.

Regulation

But first, the professor explains why the sector needs to be more closely monitored. The broader financial sector came under increased regulatory scrutiny following the 2008 financial crisis, to protect investors and society. 

The regulatory regime does not capture cryptocurrencies, however, which are launched and traded outside the domain of official financial oversight, he says.

The result is that crypto land has become an unregulated casino, where unchecked criminality runs riot.

BitMEX

He rounds on BitMEX, registered in the Seychelles, which offers highly-leveraged bets on the rises and falls of cryptoassets: products more broadly known as derivatives.

These investment products have come under the microscope of regulators in many countries. The UK's Financial Conduct Authority would like to ban the sale of cryptoasset derivatives and exchange-traded notes to retail customers, saying they are too difficult to value and are prone to extreme price movements due to the volatile moves of the underlying cryptoassets.

Other global regulators have made moves to reduce the amount of leverage offered by crypto-derivatives exchanges. Roubini points out that with a 100-1 leverage, even a 1% price move in the underlying assets could trigger a margin call that wipes out the investor's entire account and leave them owing the exchange.

Hayes, boasted openly that the BitMEX business model involves peddling to 'degenerate gamblers' (meaning clueless retail investors) crypto derivatives with 100-to-one leverage.

BitMEX aslo runs a proprietary trading desk - an internal, for-profit desk that trades cryptocurrencies with its own money - that has been accused of front-running its own clients, Roubini asserts. He adds:

Hayes has denied this, but because BitMEX is totally unregulated, there are no independent audits of its accounts, and thus no way of knowing what happens behind the scenes.

Perhaps his most grand accusation in the essay, however, is that exchange is being used for criminal activity:

BitMEX insiders revealed to me that this exchange is also used daily for money laundering on a massive scale by terrorists and other criminals from Russia, Iran, and elsewhere; the exchange does nothing to stop this, as it profits from these transactions.

Tiff in Taipei

Roubini accused Hayes this month of holding back the broadcast of a video recorded of their clash at conference in Taipei - to which Hayes had secured exclusive right to.

In the essay, he continues this accusation, saying:

I suppose this is par for the course among crypto scammers, but it is ironic that someone who claims to represent the 'resistance' against censorship has become the father of all censors now that his con has been exposed.

Crypto Cancer Metastasized

In his final dig at the industry, Roubini says crypto trading has created a multi-billion dollar industry that does not just include the exchanges, but also "propagandists posing as journalists, opportunists talking up their own books and lobbyists seeking regulatory exemptions.

It is time global regulatory bodies stepped in, he concludes:

So far, regulators have been asleep at the wheel as the crypto cancer has metastasized. At a minimum, Hayes and all the others overseeing similar rackets from offshore safe havens should be investigated, before millions more retail investors get scammed into financial ruin.

So far, Hayes appears to have remained silent following the article's publication. No activity on his Twitter account. But the ball is now firmly in his court as the war of words heats up.