Tether’s $120M Uruguay Bitcoin Mining Bet Ends in Power Dispute

Tether withdrew from a $120 million Bitcoin mining project in Uruguay after a protracted dispute with the state-owned utility UTE over electricity supply and unpaid bills. The conflict led to a power shutdown, the loss of most local jobs, and the termination of the mining sites.

Investment and Initial Plans

Tether allocated about $60 million to each of two mining sites in Uruguay’s Florida department, amounting to roughly 6 % of the country’s annual foreign direct investment. The company entered Uruguay in May 2023, citing the nation’s abundant renewable energy and established grid as attractive for sustainable Bitcoin mining.

Power Contract Disagreement

The dispute centered on the interpretation of the electricity contract with UTE. Tether believed the agreement set a minimum power allocation that could be increased, while UTE treated it as a ceiling. As the mining facilities grew their demand, they experienced days without sufficient power.

Escalation and Shutdown

By May 2025, Tether’s Uruguayan entity, Microfin, stopped paying its electricity bills, which were reported at about $2 million per month, and announced intent to terminate the contracts. UTE cut power to the sites on July 25 2025. The unpaid balance was reported near $5 million, exceeding the company’s guarantee.

On November 25, Tether notified labor authorities that operations would cease, eliminating 30 of the 38 local jobs. UTE later confirmed that Microfin settled its debts in December 2025.

Implications for Mining Strategy

Uruguay’s grid is 98 % renewable, dominated by hydroelectric and wind power, but electricity prices remain relatively high compared with neighboring markets. The episode highlights that reliable, cheap, and contract‑certain power is critical for large‑scale Bitcoin mining, especially after the April 2024 Bitcoin halving reduced block rewards.

Financial Context

Tether reported over $10 billion in profit for 2025 and a portfolio of proprietary investments exceeding $20 billion, separate from the reserves backing its USDT stablecoin. The company continues to promote Bitcoin mining in other jurisdictions, including El Salvador, despite the Uruguay setback.