Exclusive: What really happened with Tether's mining project in Uruguay — conflict with energy companies and $500 million at stake
The story of Tether's sudden shutdown of Bitcoin mining in Uruguay turned out to be far more convoluted than a simple decision about unprofitability. My analysis of internal processes shows that the root of the problem lies in a fundamental conflict with the state energy monopoly UTE, not just in tariff policy, as was previously presented.
The essence of the dispute: contract interpretation
When Tether launched two sites in the Florida department in 2023 with a total budget of $120 million, the project seemed exemplary. However, as it turns out from details that were pieced together from documents and testimonies of former contractors, the parties had planted a time bomb from the very start. Tether interpreted the agreed electricity volumes as a minimum threshold, planning to scale up. UTE, on the contrary, considered these figures a hard ceiling.
This led to the facilities experiencing regular outages after consumption grew, sometimes lasting for several days. Negotiations over a new contract reached a dead end — representatives of the USDT issuer simply did not show up for the decisive meeting. The situation was exacerbated after the political rotation in March 2025, when Yamandú Orsi came to power and UTE's management changed. However, I find no direct evidence of a political undertone — rather, this coincidence aggravated an already existing crisis of trust.
Timeline of the collapse
The key moment came in June 2025, when the local legal entity Microfin stopped paying bills. A notice of contract termination was sent, but the matter never reached the signing of a new agreement. On July 25, UTE disconnected both sites from the grid. The finale came on November 25, when Tether officially notified labor authorities of mass layoffs. At the same time, the debt for electricity and related services was estimated at approximately $4.8 million — a negligible amount for an issuer with billion-dollar reserves.
Strategic undertone and my conclusions
It is telling that Uruguay was considered merely a testing ground before expansion into Brazil, Paraguay, and Argentina. The halted capacity is just the tip of the iceberg: the plans involved investing up to $500 million, including three data centers at 165 MW and 300 MW of renewable generation. Obviously, Tether has not abandoned these ambitions — in June 2025, CEO Paolo Ardoino predicted the company's leadership in mining, valuing its investments in energy infrastructure at more than $2 billion.
In my view, the exit from Uruguay is not a defeat but a tactical regrouping. Tether demonstrated toughness in negotiations with state monopolies, which could be a signal to other Latin American governments: the issuer is not willing to tolerate unfavorable conditions. The only question is whether the company will find more accommodating partners in neighboring countries, where the energy market is often even less liberal than in Uruguay.