Mining Project Fails
Tether Abandons $120 Million Uruguay Bitcoin Mining Project Following Persistent Power Disputes
Key Points
Following Uruguay’s March 2025 government changes, UTE installed a tougher leadership stance that coincided with Microfin stopping bill payments; power was subsequently cut on July 25, 2025, and the outstanding debts were not settled until December.
Reuters described Uruguay as a launchpad for a broader push in South America, with the Uruguayan project pitched as Tether’s first major mining venture in the region and a testing ground for expansion into Brazil, Paraguay and Argentina.
By late 2025, Microfin had laid off about 30 of its 38 employees as operations wound down, reflecting the project’s contraction and eventual halt.
A core dispute centered on how much electricity Microfin could draw from UTE: Tether viewed the contract as guaranteeing a minimum allocation that could be increased, while UTE treated it as the maximum available supply.
The project reportedly exceeded $100 million in sunk costs, with roughly $50 million more earmarked for infrastructure intended to transfer to UTE and Uruguay’s national grid.
Tether's $120 million Bitcoin mining project in Uruguay has collapsed after a dispute with state utility UTE over electricity supply. The crypto company shut down two mining sites in Florida department and laid off most of its workforce, ending what Reuters had called a major South American expansion Finance Feeds.
The breakdown centered on a fundamental disagreement: Tether believed it had a contract guaranteeing minimum power allocations that could increase, while UTE treated the deal as a fixed ceiling. When Microfin, Tether's local entity, stopped paying bills in mid-2025, UTE cut power on July 25, and the project never recovered Crypto News.
Government Shift Triggers Power Cutoff and Debt Crisis
Uruguay's government changed in March 2025, bringing tougher leadership to UTE. Tensions escalated when Microfin stopped paying its electricity bills. UTE responded by cutting power on July 25, 2025, leaving both mining sites without sufficient energy to operate Bellingham Herald.
The debt dispute dragged on for months. Microfin did not settle outstanding payments until December 2025, by which point operations had essentially halted. By late 2025, the company had laid off about 30 of its 38 employees, signaling the project's collapse The News Tribune.
A $120 Million Gamble on Renewable Energy in South America
Tether launched the Uruguay project in 2023 as its first major mining venture in South America. The company spent roughly $60 million per site—about $120 million total—betting that Uruguay's renewable energy grid and political stability would give it a competitive edge Reuters.
The sites were meant to be a launchpad for expansion into Brazil, Paraguay, and Argentina. Tether had earmarked an additional $50 million for infrastructure upgrades designed to transfer to UTE and the national grid. Instead, the entire strategy unraveled over a single power contract dispute Media Selangor.
Bitcoin Halving and Price Declines Worsen Mining Economics
The project faced headwinds beyond electricity disputes. Bitcoin's halving in 2024 reduced the rewards miners receive for solving blocks. Declining Bitcoin prices through 2025 compressed margins further, making stable, cheap power even more critical to profitability Crypto News.
When power became unreliable and expensive, Tether had no reason to stay. Miners operate on razor-thin margins and chase low-cost jurisdictions constantly. The Uruguay project shows how quickly location-based advantages evaporate when energy costs rise or supply falters Finance Feeds.
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