Overview
- Reporting in August 2026 shows Tether’s two mining sites in Uruguay were effectively abandoned and operations ceased after months of power shortages and contract friction, with a former contractor estimating roughly $120 million spent on the project.
- The dispute centered on how much electricity Microfin, Tether’s Uruguayan entity, could draw under its UTE contract, with Tether viewing the clause as a minimum that could be increased and UTE treating it as a maximum allocation.
- Key steps in the collapse include a disagreement that began by November 2024, Microfin stopping payments and notifying UTE it would terminate contracts in June 2025, UTE cutting power on July 25, 2025 after unpaid bills and an unsigned memorandum, and Tether notifying labor authorities of layoffs on November 25, 2025.
- Wider shifts in mining economics — the April 2024 bitcoin ‘halving,’ subsequent price weakness and relatively high Uruguayan power costs — reduced profit margins and pushed many miners to seek cheaper energy or to repurpose capacity for AI and high‑performance computing.
- The episode highlights how large crypto firms deploy capital with limited local ties and transparency, leaves local workers and sunk investments exposed, and may steer Uruguay toward data‑center uses that rely more on broadband and less on ultra‑cheap power.