Iranian police said that 7,000 computer miners were seized in an abandoned factory in the west of the capital, the state news agency IRNA reported. The operation took place at an illegal cryptocurrency farm, their largest haul to date of the energy-guzzling machines that have exacerbated power outages in Iran.

Bitcoin and other cryptocurrencies are created through a process known as mining, where powerful computers compete with each other to solve complex mathematical problems. The process is highly energy-intensive, often relying on electricity generated by fossil fuels, which are abundant in Iran.

According to blockchain analytics firm Elliptic, around 4.5 per cent of all Bitcoin mining takes place in Iran, giving it hundreds of million dollars in revenue from cryptocurrencies that can be used to lessen the impact of US sanctions.

Iran’s economy has been hit hard since 2018, when then-President Donald Trump exited Tehran’s 2015 nuclear deal with six powers and re-imposed sanctions on the Islamic Republic.

US President Joe Biden’s administration and other global powers are pursuing talks with Iran to revive the deal.

Iran has accepted cryptocurrency mining in recent years, offering cheap power and requiring miners to sell their Bitcoins to the central bank. Tehran allows cryptocurrencies mined in Iran to be used to pay for imports of authorised goods.

The prospect of cheap state-subsidised power has attracted miners, particularly from China, to Iran. Generating the electricity they use requires the equivalent of around 10 million barrels of crude oil a year, or 4 per cent of total Iranian oil exports in 2020, according to Elliptic.