Tether Shuts Down Uruguay Bitcoin Mining Unit After $4.8M Energy Dispute

Energy Dispute Forces Tether to Shut Down Uruguay Mining Operations

Tether confirmed the shutdown on November 27 after a dispute with Uruguay’s state-owned utility, UTE, over roughly $4.8 million in outstanding energy charges. UTE claimed Tether underpaid for industrial-grade electricity drawn during a period of hydro-dependent price spikes, triggered by prolonged regional droughts that reduced reservoir output across the Río de la Plata basin.

While the figure is modest relative to Tether’s scale as the issuer of USDT, a stablecoin with over $120 billion in circulation, the company framed the dispute as evidence of “unpredictable cost structures” that undermine mining profitability.

Bitedge analysts noted the irony: Tether chose Uruguay precisely because of its near-90% renewable energy mix and historically stable pricing. Rates hovered around $0.04–$0.05 per kilowatt-hour during wet seasons. The same hydro-heavy structure became a liability once water levels fell, forcing UTE to import higher-cost thermal power from neighboring markets. Internal documents reviewed by industry sources show Tether’s effective power cost spiked to nearly $0.12 per kWh in the second half of 2025, well above the break-even point for most modern ASIC miners.

The clash over energy billing in Uruguay carries a familiar dynamic for Tether. In 2021, the firm paid a $41 million fine to the U.S. Commodity Futures Trading Commission for misleading statements about USDT’s reserves. The disputes are different in nature, yet both highlight Tether’s recurring friction with traditional institutions.

In Uruguay, UTE accused Tether of requesting “industrial mining tariffs without meeting load requirements,” while Tether claimed the utility applied price revisions without proper notice. That breakdown mirrors, in tone if not scale, earlier transparency battles that shaped public perceptions of the stablecoin issuer.

Uruguay was supposed to anchor Tether’s push into regionally distributed mining. The company began hiring local technicians in 2023 and positioned the site as a low-risk, renewable-first operation insulated from the grid volatility seen in other countries.

Local reporting indicates that Tether’s site relied primarily on energy sourced from Uruguay’s interconnected grid, which normally benefits from a blend of hydro, wind, and biomass. But the 2024–2025 drought cycle sharply reduced hydro capacity and lifted spot-market imports from Argentina and Brazil.

UTE said industrial rates were adjusted to reflect these costs. Tether, however, argued that it signed its agreement during a period of normal hydrological conditions and expected pricing to track annualized trends, not short-term spikes. The mismatch created a billing gap that neither side was willing to absorb.

One former UTE adviser described the situation as “a classic tariff mismatch amplified by volatile weather patterns,” noting that drought pressure had accrued over months before hitting industrial clients.

Mining Strategy Under Review

Tether has invested in mining sites across Uruguay, Paraguay, El Salvador, and parts of North America, aligning with its broader plan to diversify revenue beyond stablecoins. The Uruguay exit now forces a strategic reassessment.

The company said it will “pivot to more resilient jurisdictions,” a phrase understood by analysts as code for regions with:

• Multi-year fixed-rate energy contracts
• Less exposure to hydrological cycles
• Larger industrial generation buffers

Several observers expect Tether to redirect some of its Uruguay resources toward Paraguay, where energy from the Itaipu Dam remains comparatively cheap, though local congestion and export limits pose risks of their own.

Global Market Implications

The shutdown will not meaningfully affect Bitcoin’s hash rate — Tether’s Uruguay site represented a small portion of global mining power — but the move reinforces a growing trend: The economics of mining are shifting away from renewables-dependent grids with seasonal variance and toward stable baseload regions capable of predictable industrial pricing.

More broadly, the event lands during a period of heightened macro uncertainty for crypto markets. Bitcoin, trading near the $90,000–$98,000 range through late November, has faced volatility tied to U.S. rate expectations and shifting ETF inflows. Mining disruptions typically don’t sway price directly, but they contribute to a mounting sense that supply-chain, energy, and jurisdictional risks are resurfacing simultaneously.

What Comes Next

Tether says it will settle remaining operational obligations in Uruguay and relocate hardware over the coming weeks. Meanwhile, the dispute is expected to continue through local administrative channels, though neither party has signaled litigation.

Form our news desk, the takeaway is clear: even the industry’s largest stablecoin issuer is not immune to the energy economics reshaping the mining landscape.