Tether abandons $120 million Uruguay bitcoin mining project over UTE power dispute
This digest was compiled by AI from multiple sources — links to the originals are below.
Tether abandoned its estimated $120 million bitcoin mining project in Uruguay after a contractual dispute with state-owned power utility UTE. UTE cut power to the two mining sites on July 25, 2025, and Tether notified labor authorities on Nov. 25 that it would end operations and lay off most staff. The collapse marks the failure of Tether's planned first step into the South American market.
Key Facts
- Tether spent an estimated $120 million on the Uruguay mining project, according to a source with knowledge of the deal.
- UTE cut power to the two mining sites on July 25, 2025, after Tether's Uruguayan entity Microfin stopped paying electricity bills.
- Tether notified Uruguay's labor authorities on Nov. 25, 2025, that it would end operations and lay off most of its staff.
- Tether and UTE disagreed on whether the contracted power supply figure was a minimum or a hard cap.
- Tether had described Uruguay as a 'perfect platform' and a testing ground before expanding into Brazil, Paraguay, and Argentina.
Contract Dispute
Tether and UTE disagreed on how much power the two mining sites were entitled to under the contract. Tether considered the agreed-upon power supply figure a minimum that could be increased, while UTE viewed it as a hard cap. The two sites, located in Uruguay's Florida department, initially ran well and generated income, according to two former contractors. As electricity demand increased, the operation sometimes lacked sufficient power for days at a time. Both sides sought to resolve the dispute by signing a revised contract, but Tether representatives did not show up to the signing, according to meeting notes obtained by Reuters.
Political Shift
The dispute intensified after the election of left-leaning President Yamandú Orsi, who took office in March 2025 and appointed new UTE directors. The new UTE leadership took a harder line on contract negotiations, according to a former contractor and another source. Microfin, Tether's Uruguayan legal entity, stopped paying its electricity bills two months after the change in government. Microfin told UTE in June 2025 that it intended to terminate its contracts. With the revised agreement unsigned and bills unpaid, UTE cut power to the sites on July 25, 2025.
Regional Ambitions
Tether announced its Uruguay mining operation in May 2023, calling the country a 'perfect platform' due to its renewable electricity and established grid. A former contractor said Tether viewed Uruguay as a 'first step' and testing ground before expanding into Brazil, Paraguay, and Argentina. In June 2025, CEO Paolo Ardoino said Tether would become the 'biggest bitcoin miner out there' by the end of the year. Tether said it had invested more than $2 billion in energy and mining infrastructure across 15 sites in Uruguay, Paraguay, and El Salvador. UTE disconnected the two Uruguay sites one month after Ardoino's statement.
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Tether abandons $120 million Uruguay bitcoin mining project over UTE power dispute
