Tether's $120M Uruguay Mining Bet Crushed by Contract Dispute
Tether's ambitious foray into Bitcoin mining in Uruguay has hit a snag. The company invested approximately $120 million in two mining sites, but a contract dispute with Uruguay's state power company UTE led to unpaid bills and eventually a complete shutdown of the operations.
The issue began when Tether interpreted an electricity contract as allowing it to increase its power allocation as demand grew, while UTE saw it as a hard ceiling that could not be exceeded. The disagreement intensified after President Yamandú Orsi's left-leaning government took office in March 2025 and installed new leadership at UTE.
The shutdown eliminated 30 of the company's 38 local jobs and highlighted the risks involved in investing in renewable energy markets for crypto mining. While Uruguay generates 98% of its electricity from renewable sources, the cost premium associated with this clean power makes it less competitive for mining compared to neighboring markets.