Iran’s cryptocurrency mining sector is facing scrutiny from United States Senators Elizabeth Warren and Angus King, who consider it a threat to national security.

In a letter to National Security Advisor Jake Sullivan, Defense Secretary Lloyd Austin, and Treasury Secretary Janet Yellen on May 1, the senators have called on the Biden administration to outline potential connections between the Iranian government and local crypto miners.

Senators Warren and King are concerned that digital assets mined in Iran are being used to evade U.S. sanctions and support terrorist groups like “Hezbollah.” They also allege that these funds were used in Iran’s recent attack on Israel in April.

Iran has been under U.S. sanctions and from other international bodies since 1979. Earlier this year, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on several entities involved in the illegal export of technology from multiple U.S. companies to Iran.

“Unless we take action, Iran will continue to use crypto to fund attacks against Israel,” the letter stated.

The senators referenced a report indicating that the Iranian government prefers “newly minted” Bitcoin as it is “less traceable.” It was reported that Bitcoin miners in Iran generated $1 billion in revenue in 2021.

As a result, the Senators have requested U.S. officials to provide information on the revenue generated by Iranian crypto miners, its potential use in money laundering, and their plans to address these threats to U.S. national security.

Interestingly, the Iranian government has taken steps to regulate the cryptocurrency mining sector since it was legalized in the nation in 2019.

In 2021, the nation seized around 150,000 pieces of crypto-mining equipment to address concerns of electricity consumption. The equipment was later released in January of the following year.

For more information, read about the Iran-Israel conflict and how negative funding rates triggered an $860 million crypto sell-off.

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