Uruguay’s state power company, UTE, cut electricity to a Bitcoin mining project on July 25, 2025, silencing a facility in the rural part of Florida Department that had been running for two years. The project had an estimated investment of about $120 million, and 30 of its 38 local employees lost their jobs.
Once framed as a South American showcase for green-energy mining, the project ended with an unsigned revised contract and overdue payments that at one point were close to $5 million.
Tether entered Uruguay in 2023 with a two-site mining plan
In May 2023, stablecoin issuer Tether announced its move into Uruguay, planning to work with locally licensed company Microfin to build two Bitcoin mining sites in Florida Department.
Uruguay’s appeal was clear at the time. The country’s power mix is 98% renewable, mainly hydroelectric and wind, and it was seen as offering a stable grid and a friendly regulatory setting. A former contractor estimated that Tether later spent roughly $60 million on each site, bringing the total to about $120 million.
For Tether, the move was not presented simply as a mining business. It was part of a broader push to channel profits into real-world energy infrastructure. The report said Tether posted about $6.2 billion in profit for full-year 2023 and was expanding into areas including energy and AI.
According to former contractors interviewed by Reuters, the project initially ran smoothly. Both sites were producing and generating revenue, and the local team grew to 38 employees.
A contract number became the center of the dispute
The breakdown came over electricity supply, the most important operating input for the mine. The disagreement focused on one figure in the power contract.
Tether’s side understood the contracted supply figure as a guaranteed minimum, meaning additional electricity could be requested as the mining farm expanded. UTE took the opposite view and treated the same number as a hard maximum that could not be exceeded.
Bitcoin mining machines need to run around the clock. As the project scaled and power demand increased, both sites began facing repeated restrictions. At times they went several days without enough electricity, cutting directly into mining output and revenue.
By late 2024, the dispute was already in place. In 2025, leftist President Yamandú Orsi took office in Uruguay, UTE changed management, and the utility adopted a tougher negotiating position. From there, the communication process stalled and trust between the parties deteriorated.
The project unraveled within months
In May 2025, Microfin stopped paying electricity bills. In June, it formally notified UTE that it was terminating the contract.
According to an internal briefing reviewed by Reuters, UTE had prepared a revised agreement in an attempt to preserve the project, but Tether representatives did not attend the signing ceremony.
UTE then formally disconnected the power on July 25, 2025. Local outlet El Observador reported that Microfin’s debt had by then climbed to nearly $5 million. Monthly electricity bills were about $2 million, and the overdue amount had exceeded the guarantee posted earlier.
On Nov. 25, 2025, Tether formally notified local labor authorities that operations would stop. Broadcaster Teledoce later confirmed that 30 of the 38 employees had been laid off.
By December 2025, Microfin had paid off all outstanding debt.
Green power did not translate into low-cost mining
The collapse of the project highlights two issues for capital-heavy overseas investments.
The first is cost. Uruguay’s electricity system is unquestionably green, but the report said it does not stand out as especially competitive on mining power prices globally. That mattered even more after Bitcoin’s 2024 halving, which cut the block reward from 6.25 BTC to 3.125 BTC and squeezed margins across the sector.
The second is rule certainty. Tether entered Uruguay for its renewable power base and its political stability, but the report noted that management at public utilities can change along with shifts in government, and negotiating approaches can change with them. It said that is not unusual in Latin America.
For projects that depend on long-term, stable electricity supply, continuity in policy and contract interpretation can be harder to secure than the headline power mix itself.
Tether could absorb the loss, but the lesson is clear
The report said the roughly $120 million loss is manageable for Tether, which has annual profit above $10 billion and an investment portfolio exceeding $20 billion. It also said the company is still moving ahead with plans in places including El Salvador.
Even so, the episode offers a straightforward business lesson: in capital-intensive operations, scale alone is not enough. Clear contract alignment and genuine cost advantage still decide whether a project holds together.