DUBAI: Iranian police have seized 7,000 computer miners at an illegal cryptocurrency farm, their largest haul to date of the energy-guzzling machines that have exacerbated power outages in Iran, state media reported on Tuesday.

In late May, Iran banned the mining of cryptocurrencies such as Bitcoin for nearly four months as part of efforts to reduce the incidence of power blackouts blamed by officials on surging electricity demand during the searingly hot and dry summer.

Tehran police chief General Hossein Rahimi said the 7,000 computer miners were seized in an abandoned factory in the west of the capital, the state news agency IRNA reported.

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% 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 reimposed 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 crypto 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% of total Iranian oil exports in 2020, according to Elliptic.