Tether Abandons $120 Million Uruguay Bitcoin Mining Project Over Power Dispute

In Brief:

• Tether abandoned its estimated $120 million Uruguay Bitcoin mining project because conflicting electricity contract interpretations disrupted both facilities’ operations.
• UTE disconnected both sites following unpaid bills, while Tether closed operations and dismissed most employees linked to the project in Uruguay.
• Despite leaving Uruguay, Tether retains regional energy investments, while high power costs further weaken Bitcoin mining economics across the country.

Tether has abandoned its estimated $120 million Bitcoin mining project in Uruguay following a contractual dispute with state-owned power provider UTE. According to Reuters, the disagreement concerned electricity allocations for two mining facilities located in Uruguay’s Florida department.

Tether viewed the contracted power figure as a minimum that UTE could increase when mining demand expanded. However, UTE treated the same figure as a fixed maximum and rejected requests for additional electricity.

As mining activity expanded, power shortages disrupted operations and left the facilities without adequate electricity for days. Both parties later negotiated revised terms intended to resolve their conflicting contract interpretations.

Government Transition Complicated Contract Negotiations

The dispute reportedly intensified following Yamandú Orsi’s inauguration as Uruguay’s president in March 2025. Orsi appointed new UTE directors, while the incoming leadership adopted a stricter approach toward Tether’s contract.

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Microfin, Tether’s Uruguayan legal entity, stopped paying electricity bills two months following the government transition. Additionally, Microfin informed UTE in June 2025 that it intended to terminate the contracts covering both facilities.

UTE disconnected electricity from both sites on July 25, 2025, with payments outstanding. Tether later notified labor authorities that it would close operations and dismiss most employees. A source familiar with the investment estimated that Tether committed approximately $120 million to the project.

Tether Maintains Wider Regional Mining Investments

Tether introduced the Uruguay operation in May 2023 as an entry point for wider Bitcoin mining expansion across South America. Uruguay attracted the company through renewable electricity, dependable infrastructure, political stability, and a national power grid.

Moreover, Tether reportedly viewed the country as a testing ground before pursuing projects in Brazil, Paraguay, and Argentina. Despite leaving Uruguay, Tether retains several regional investments involving renewable energy and mining infrastructure.

It acquired a 70% stake in renewable energy producer Adecoagro and arranged access to the company’s surplus electricity. Meanwhile, Uruguay’s high electricity prices reduce its appeal for Bitcoin miners seeking sustainable operating margins.

Mining specialist Nicolas Ribeiro explained that operators frequently relocate or close facilities because industry economics change rapidly. Uruguay’s dependable infrastructure may therefore offer stronger commercial advantages for artificial intelligence data centers than Bitcoin mining operations.

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