Tether abandoned an estimated $120 million bitcoin mining operation in Uruguay after a contract dispute with state power utility UTE over electricity supply limits. The stablecoin issuer believed an agreed power figure was a minimum baseline that could be expanded; UTE treated it as a hard cap. When the sites began drawing more power and sometimes went dark for days, negotiations broke down. Tether's local representatives skipped the signing of a revised contract, stopped paying bills in June 2025, and UTE cut power in July. Tether notified Uruguay's labor authorities in November that it would close the sites and lay off most staff. One source with direct knowledge told Reuters the project cost around $120 million. Tether has not disclosed the figure publicly and did not respond to requests for comment.
The collapse matters because Uruguay was supposed to be a testing ground for wider South American expansion into Brazil, Paraguay, and Argentina, according to a former contractor. Tether's May 2023 announcement described Uruguay as the "perfect platform" due to renewable electricity and grid stability, and the company said it would "soon" expand mining to other countries. The dispute intensified after Uruguay's left-leaning government took office in March 2025 and appointed new UTE directors, who reportedly took a harder negotiating line. The project ran well initially and generated income, per two former contractors, but the mismatch over power entitlements and the political shift killed the deal.
For traders, this is a policy and execution risk story, not a bitcoin catalyst. A $120 million write-down on a single project does not change bitcoin's hash rate outlook or miner economics globally. The collapse signals that regulatory and contractual friction in emerging markets can derail infrastructure plays, but the broader miner sector is unaffected; this is a single operator exiting a single country.
The thing to watch is whether Tether resurfaces mining plans in Brazil, Paraguay, or Argentina as originally intended, or whether this failure closes the South American expansion for good. If Tether announces a new mining partnership in the region within six months, it would indicate the Uruguay loss was treated as a one-off political misstep. If the company goes silent on mining expansion or pivots to North America or the Middle East, it suggests emerging-market infrastructure risk is now priced into Tether's strategy.
Source: The Block