Tether halts $120M Bitcoin mining project in Ur...

Tether's planned Bitcoin mining expansion in Uruguay has collapsed after an electricity supply dispute with state utility UTE left two facilities without enough power, ending a project estimated to have cost around $120 million, according to a crypto.news report citing Reuters published on 2026-08-21. The local entity Microfin terminated its contracts with UTE, and a former contractor told Reuters Tether spent roughly $60 million on each of the two sites in Uruguay's Florida department. The venture had been presented in 2023 as Tether's first major Bitcoin mining operation in South America, with Uruguay described at the time as the "perfect platform" because of its renewable energy supply and reliable electricity grid.

Background

When Tether announced the Uruguay operation in May 2023, it did not disclose an investment figure and framed the country as a testing ground before potential expansion into Brazil, Paraguay and Argentina. According to the crypto.news report, Tether viewed Uruguay as an entry point for a much larger regional mining operation, citing a former contractor who worked with the company. The country offered political stability, established infrastructure and an electricity system powered heavily by renewable sources, while the Florida facilities allowed Tether to test its mining model before committing more capital elsewhere. The report also notes that Tether CEO Paolo Ardoino and chairman Giancarlo Devasini have been frequent visitors to the coastal resort of Punta del Este, according to industry sources cited by Reuters. By late 2025, crypto.news reported that the company had informed Uruguay's labor authorities it would cease local operations and had laid off 30 of its 38 employees. More than $100 million had already been spent at that time, while another $50 million had been earmarked for infrastructure expected to pass to UTE and Uruguay's National Interconnected System. The sources describe the dispute as rooted in how each side read the same electricity contract provision.

What happened

Reuters reported that Tether abandoned two mining sites in Uruguay's Florida department after disagreements over electricity allocations disrupted operations and eventually led its local entity, Microfin, to terminate contracts with UTE, according to the crypto.news account. At the core of the failure was a disagreement over how much power Microfin could draw from UTE, according to two former Tether contractors and a source at the state utility cited by Reuters. One former contractor said Tether understood a provision in its electricity contract as setting a minimum power allocation that could later be increased, while UTE interpreted the same amount as the maximum level available under the agreement. As demand at the mining facilities increased, the difference became critical, and one former contractor told Reuters the sites sometimes lacked enough electricity to operate for days at a time. An internal UTE briefing reviewed by Reuters showed the disagreement was already underway by November 2024. Political changes later complicated negotiations: Uruguay's new left-leaning government took office in March 2025 and appointed new directors at UTE, after which the utility adopted a firmer position on renegotiating the electricity agreement, one former contractor told Reuters. Two months later, Microfin stopped paying electricity bills, and the company informed UTE in June 2025 that it intended to terminate its contracts, according to the utility's internal briefing. UTE's board approved a memorandum of understanding and revised contract documents, but Tether representatives did not attend the scheduled signing, minutes included in the briefing showed. UTE disconnected electricity to the facilities on July 25. Earlier reporting put the unpaid balance connected to the two sites at roughly $5 million, and Microfin eventually settled the outstanding debt in December, UTE told Reuters. Tether and Microfin did not respond to the news agency's requests for comment about the contract.

Market impact

The sources provide no Bitcoin price, hash rate, trading volume or capital flow figures, so no market reaction can be quantified from them. The numbers that do appear are project-specific. The project was estimated to have cost around $120 million, with a former contractor telling Reuters Tether spent roughly $60 million on each of the two sites. By late 2025, crypto.news reported more than $100 million had already been spent, while another $50 million had been earmarked for infrastructure expected to pass to UTE and Uruguay's National Interconnected System. Tether laid off 30 of its 38 local employees when it informed Uruguay's labor authorities it would cease operations. Earlier reporting put the unpaid balance connected to the two sites at roughly $5 million, a debt Microfin eventually settled in December, UTE told Reuters. The report does not state Tether's total mining capacity, its share of network hash rate, or any effect on Bitcoin markets, and it does not quantify the value of infrastructure expected to transfer to UTE and the National Interconnected System.

Why it matters

The sources frame the collapse as the end of what Tether presented in 2023 as its first major Bitcoin mining venture in South America, a project intended as a testing ground before potential expansion into Brazil, Paraguay and Argentina. A former contractor told Reuters that Tether had initially viewed Uruguay as an entry point for a much larger regional mining operation, so the failure removes the base from which that expansion was to be assessed. The dispute also illustrates how a single contractual ambiguity can unwind a capital-intensive operation: the same provision was read by Tether as a minimum allocation that could later be increased and by UTE as the maximum available, and the gap became critical as demand rose. The timeline in the UTE briefing, from a disagreement underway by November 2024 to disconnection on July 25 and a December settlement, shows the dispute persisted through political change in Uruguay, after which the utility adopted a firmer position on renegotiating, according to one former contractor. The report does not say whether Tether plans to pursue mining elsewhere in the region.