Global cryptocurrency financial company Tether has officially confirmed that it will cease mining operations in Uruguay and lay off 30 of its 38 employees, citing unsustainable energy costs and uncompetitive electricity rates.
The decision was made public after ministry officials confirmed this to Uruguayan newspaper El Observador during a recent meeting at the National Labor Office (Dinatra).
The company planned to invest $500 million in Uruguay, including building three data processing centers and a 300-megawatt renewable energy park. However, only about $100 million of the planned investment was completed before the project became economically unviable.
Tether’s sudden decision to cease operations in Uruguay sparks debate
Notably, since arriving in Uruguay, the Tether team has made clear its intention to invest heavily in the country. This includes the development of three data processing centers in Florida and Tacuarembo, which will require approximately 165 MW of power supply. It also aimed to build a wind and solar power park. The project required 300 MW of power.
Of this total, Tether spent over $100 million. At the same time, an additional $50 million was specifically set aside for infrastructure owned by UTE and the National Interconnection System.
The company then claimed that it was no longer able to fund the initiative as it could not generate enough funds under the current circumstances. The contract terms and the 31.5 kV toll used in Florida increased operating costs, according to the report. However, Tether has repeatedly requested improvements to its pricing plans since November 2023.
One of the proposals put forward by crypto companies to address this situation was to move the tariff to 150 kV and adjust the power purchase agreement. Several analysts commented on this proposal. They expressed the belief that this change could have saved UTE money and prevented the construction of unnecessary structures.
Tether explores options to remain in Uruguay
The withdrawal plan was initially leaked to the public. in early September. Local news outlet Telemundo initially reported that reported Tether has decided to suspend its cryptocurrency mining operations and future plans in Uruguay. According to local media, this was after the National Authority for Generating and Transmission (UTE) cut off power to the facility due to non-payment of $2 million in electricity bills for May.
Telemundo also said Tether has approximately $2.8 million in debt arising from other local projects. This brings the total debt, excluding fines and surcharges, to approximately $4.8 million. This information was first published 2 days ago. searchanother local news outlet.
In response, Tether denied claims that it was leaving Uruguay over a $4.8 million debt dispute with one of the state-owned power companies.
Tether disputed these reports in a statement to media platforms, saying it was still considering the best way forward in Uruguay and the wider region. He also argued that while some news platforms have hinted that they will leave the country, their claims do not truly reflect the reality of the situation.
The company also acknowledged the debt issue and said that the local company responsible for managing the cryptocurrency mining operations is in talks with the government to resolve existing issues.
“Tether supports these efforts and aims for positive solutions that demonstrate our long-term commitment to sustainable opportunities in the region,” it added.