Tether walks away from $120 million Uruguay bitcoin mining build after power contract dispute

Tether has scrapped an estimated $120 million bitcoin mining project in Uruguay after a contract dispute with state-owned utility UTE disrupted operations at two sites, Reuters reported. The disagreement centered on electricity allocations for facilities in Uruguay's Florida department. Tether said it treated the contracted power amount as a minimum that UTE could raise as demand grew. UTE viewed the same figure as a hard cap and declined requests for additional supply. As mining activity scaled up, the sites faced shortages that interrupted operations and left them without sufficient power for days. Talks later produced revised terms aimed at reconciling the two interpretations, but negotiations reportedly became more difficult after Yamandú Orsi took office as president in March 2025 and appointed new UTE directors. The incoming leadership adopted a tougher stance on the agreement. Microfin, Tether's Uruguayan legal entity, stopped paying electricity bills about two months after the government change. In June 2025, Microfin told UTE it planned to end the contracts covering both facilities. With payments still outstanding, UTE cut power to both sites on July 25, 2025. Tether then informed labor authorities it would shut the operation and lay off most employees tied to the project. A source familiar with the investment said Tether's commitment to the Uruguay build totaled about $120 million. Tether announced the Uruguay operation in May 2023 as a foothold for broader South American expansion, citing renewable power, reliable infrastructure, political stability and a national grid. Uruguay was also seen as a proving ground ahead of potential projects in Brazil, Paraguay and Argentina. While exiting Uruguay, Tether continues to hold regional energy and mining-related investments. The company acquired a 70% stake in renewable energy producer Adecoagro and secured access to its surplus electricity. Industry participants say Uruguay's relatively high power prices have weakened the country's appeal for bitcoin miners seeking consistent margins. Mining specialist Nicolas Ribeiro said operators frequently relocate or shut sites as economics shift quickly, adding that Uruguay's infrastructure could ultimately be better suited to AI data centers than to bitcoin mining.