Tether has walked away from its Bitcoin mining operation in Uruguay, abandoning two facilities that cost an estimated $120 million after a prolonged tussle with state utility UTE over the power numbers available to the sites.
This move ends the $USDT issuer’s initial move into South American mining.
Power dispute due to unclear contract clauses
According to two former Tether contractors and a source from state utility organization UTE cited by Reuters, the company’s local operator, Microfin, and the utility never agreed on how much electricity the mining sites were entitled to.
A former contractor also told Reuters that Tether saw a figure in its supply contract as a minimum it could subsequently scale. However, UTE claims this number was a hard maximum.
The gap did not really matter while the facilities were small, but it became a significant hurdle once the sites increased in size and productivity. There were stretches when the mines went days without enough power to run, the contractor said.
An internal UTE briefing reviewed by Reuters also claimed the two sides were already at odds by November 2024.
Unpaid bills and an unattended signing
Uruguay’s new left-leaning administration took office in March 2025 and installed fresh directors at UTE, leading to the utility being less inclined on reworking the deal, one former contractor told Reuters. By May, Microfin had stopped paying its electricity bills, and in June it notified UTE that it planned to end the contracts.
A last attempt to save the arrangement where UTE’s board signed off on a memorandum of understanding and revised paperwork fell apart as Tether’s representatives failed to show up to sign, according to meeting minutes in the briefing.
With nothing signed and about $5 million in outstanding bills, the UTE cut power to both sites on July 25. Microfin subsequently cleared the debt in December, the utility told Reuters.
Tether’s $120 million Uruguay bet crumbles
Tether called Uruguay the “perfect platform” when it unveiled the operation in May 2023, and pointed to the country’s renewable power and dependable grid. The two sites, in the Florida department, were meant as an initial testing ground before the company pushed mining into Brazil, Paraguay and Argentina. Tether’s spend per site was reportedly around $60 million.
More than $100 million had gone into the project by late 2025, with a further $50 million set aside for infrastructure meant to eventually transfer to UTE and Uruguay’s National Interconnected System. A February 2024 company video showed mining halls surrounded by farmland and wind turbines, with access roads named “Memepool Avenue” and “Halving Street.”
Reuters reported that CEO Paolo Ardoino and chairman Giancarlo Devasini were regular visitors to the resort town of Punta del Este, where billionaire Peter Thiel is reportedly building a $10 million compound.
The Uruguay disappointment has not slowed Tether’s mining ambitions across the region. In July 2025, the same month UTE pulled the plug on the partnership, the $USDT issuer struck a deal with agricultural producer Adecoagro to mine Bitcoin on renewable power in Brazil. The failed South American testing ground was all but replaced already less than one month in.
