Tether abandons $120M Uruguay Bitcoin mining project after power dispute

Tether has abandoned its $120 million Bitcoin mining project in Uruguay after a dispute with state utility UTE over electricity supply, according to a Reuters report cited by crypto.news on 2026-08-21. The project, operated locally by Tether entity Microfin, was presented in 2023 as Tether's first major mining venture in South America. A former contractor told Reuters Tether spent roughly $60 million on each of two sites in Florida department. By late 2025, crypto.news reported Tether had told Uruguay's labor authorities it would cease local operations and had laid off 30 of its 38 employees, with more than $100 million already spent. UTE disconnected power on July 25, and Microfin settled outstanding debt in December, UTE told Reuters.

Background

Tether announced the Uruguay operation in May 2023 without disclosing an investment figure, describing the country as the "perfect platform" because of its renewable energy supply and reliable electricity grid. The project was framed as a testing ground before potential expansion into Brazil, Paraguay and Argentina, according to Reuters. A former contractor who worked with the company said Tether initially viewed Uruguay as an entry point for a much larger regional mining operation, citing political stability, established infrastructure and a heavily renewable-powered electricity system. The Florida department facilities allowed Tether to test its mining model before committing more capital elsewhere. Reuters also noted that Tether CEO Paolo Ardoino and chairman Giancarlo Devasini have been frequent visitors to the coastal resort of Punta del Este, which industry sources said has attracted wealth. The dispute at the core of the failure concerned 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 allocation that could later be increased, while UTE interpreted the same amount as the maximum available under the agreement.

What happened

According to Reuters, Tether abandoned two mining sites in Uruguay's Florida department after disagreements over electricity allocations disrupted operations and eventually led Microfin to terminate contracts with UTE. An internal UTE briefing reviewed by Reuters showed the disagreement was already underway by November 2024. One former contractor said the sites sometimes lacked enough electricity to operate for days at a time. 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. The company informed UTE in June 2025 that it intended to terminate its contracts, according to the utility's internal briefing. The two sides still attempted to preserve the project; 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. With the agreement unsigned and bills outstanding, UTE disconnected electricity to the facilities on July 25. Earlier reporting put the unpaid balance connected to the two sites at roughly $5 million. 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. crypto.news reported that by late 2025 Tether had informed Uruguay's labor authorities it would cease local operations and had laid off 30 of its 38 employees, with more than $100 million already spent and another $50 million earmarked for infrastructure expected to pass to UTE and Uruguay's National Interconnected System.

Market impact

The sources provide no market prices, trading volumes or capital flow data tied to the collapse. The only financial figures are project-specific: a total estimated cost of around $120 million, with a former contractor telling Reuters Tether spent roughly $60 million on each of the two sites. crypto.news reported that by late 2025 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. Earlier reporting put the unpaid balance connected to the two sites at roughly $5 million, which Microfin eventually settled in December, UTE told Reuters. Tether did not disclose an investment figure when it announced the Uruguay operation in May 2023. No source describes any effect on Bitcoin's hash rate, mining difficulty, Tether's token reserves or broader crypto market pricing. The reported layoffs of 30 of 38 employees are the only workforce figures given. Because the sources do not quantify any market-level consequence, no assessment of price or flow impact can be made from them.

Why it matters

The sources support several consequences. First, Tether's stated plan to use Uruguay as a testing ground before potential expansion into Brazil, Paraguay and Argentina is now disrupted, according to Reuters, which reported that a former contractor said Tether had viewed Uruguay as an entry point for a much larger regional mining operation. Second, the episode illustrates contract interpretation risk in power agreements: Reuters reported that Tether understood a provision as a minimum allocation that could be increased, while UTE read the same amount as a maximum, and one former contractor said the sites sometimes lacked enough electricity to operate for days. Third, the timeline shows how political change can affect such projects: Uruguay's new left-leaning government took office in March 2025 and appointed new UTE directors, after which the utility adopted a firmer position on renegotiating, one former contractor told Reuters. Fourth, the sources describe a financial and employment cost: roughly $120 million estimated total, more than $100 million spent by late 2025, another $50 million earmarked for infrastructure expected to pass to UTE and the National Interconnected System, and layoffs of 30 of 38 employees reported by crypto.news. The sources do not describe consequences for Tether's stablecoin business or the wider Bitcoin mining market.