Global crypto‑finance company Tether has officially confirmed it is ceasing its mining operations in Uruguay and laying off 30 of its 38 employees, citing unsustainable energy costs and uncompetitive electricity tariffs.
The decision was made public after sources from the ministry confirmed this to El Observador, a Uruguayan newspaper, during a recent meeting held at the National Directorate of Labour (Dinatra).
The company had planned a $500 million investment in Uruguay, including the construction of three data processing centers and a 300-megawatt renewable energy park. However, only around $100 million of the planned investment was completed before the project became economically unviable.
Tether’s sudden decision to halt its operation in Uruguay ignites debates
Notably, since Tether’s team arrived in Uruguay, they have made clear their intentions to make a significant investment in the country. This included developing three Data Processing Centers in Florida and Tacuarembó that required approximately 165 MW of power supply. They also aimed at constructing a Wind and Photovoltaic Generation Park. This project required a 300 MW power supply.
Out of this total, Tether had spent over $100 million. At the same time, it had set aside another USD 50 million specifically for infrastructure that UTE and the National Interconnected System would own.
Later, the company claimed that it could no longer fund this initiative because it was not generating enough money under the current circumstances. According to reports, the terms of the contract and the 31.5 kV toll fees used in Florida increased operating costs. However, Tether had requested a better pricing plan multiple times since November 2023.
One of the proposed suggestions that the crypto firm presented to tackle this situation was shifting to 150 kV tolls and adjusting the power purchase agreement. Several analysts weighed in on this proposal. They expressed their belief that this change could have helped UTE save money and prevent the construction of unnecessary structures.
Tether looks for options to remain in Uruguay
The exit plans had initially leaked to the public earlier in September. A local news outlet, Telemundo, had initially reported that Tether decided to stop its crypto mining operations and future plans in Uruguay. This was after the National Administration of Power Plants and Electric Transmissions (UTE) cut off power supply to its facilities because it had not paid a $2 million electricity bill for May, according to the local media.
Telemundo further stated that Tether owed other debts of approximately $2.8 million, which resulted from other local projects. This brought the total amount of debt it owed to approximately $4.8 million, excluding any fines or extra charges. This information was initially published two days earlier by Busqueda, another local news outlet.
Respondingly, Tether denied these claims of leaving Uruguay because of a $4.8 million debt problem with one of the state-owned electricity firms.
In a statement to a media platform, Tether contested these reports, saying it is still weighing the best way to progress in Uruguay and the broader region. They also argued that while some news platforms suggest that they are leaving the country, their claims did not truly reflect the reality of the situation.
The company also acknowledged the debt issue and noted that the local firm responsible for managing the crypto mining operations has been engaged in discussions with the government to resolve the existing problem.
“Tether supports these efforts and aims for a positive solution that shows our long-term commitment to sustainable opportunities in the area,” It added.
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