Tether Exits Uruguay Amid Contract Dispute and Sudden Shutdown of Mining Sites

Highlights:

• Tether is facing rising energy costs in Uruguay, putting pressure on its mining plans.
• Tether will exit Uruguay after a long tariff dispute that has stalled its expansion plan.
• Regional markets are offering cheaper power and attracting miners who seek predictable electricity tariffs.

Tether confirmed the shutdown of its Bitcoin mining operation in Uruguay after a series of failed negotiations with the national power provider. The company ended its plan during a meeting with officials at the National Directorate of Labor. It also laid off 30 of its 38 employees after the talks ended without progress. The closure followed a power cut in late July when UTE halted supply over almost $5 million in unpaid bills.

BREAKING:

Tether Ceases Operations in Uruguay Citing High Energy Costs

Tether has laid off 30 of its 38 staff in Uruguay, halting its massive $500 million crypto mining operations, citing high electricity costs. pic.twitter.com/Y2E8xCZEbz

— Layer Alpha (@LayerAlpha) November 27, 2025

The dispute grew over tariff concerns as Tether argued that the current electricity structure raised operating costs to unsustainable levels. The company demanded new conditions and a transition to 150 kV tolls to minimize costs. However, UTE did not approve the change, which increased the tension between the two sides. The firm then informed officials that the project could not continue under these conditions.

Tether entered Uruguay two years ago through a partnership with a licensed local company. The company praised the country’s reliable grid at the time and planned to support the energy sector with new investments. These talks collapsed once the tariff conflict escalated and the power cut disrupted the mining sites. The failed negotiations brought the company’s local expansion to an abrupt end.

Tether Exits Uruguay as $500 Million Expansion Plan Falls Apart

Tether planned a major investment that included three data centers and a 300-megawatt renewable energy park. The project needed 165 megawatts of power to run the data centers alone. The company spent around $100 million and reserved $50 million for infrastructure that UTE would own. The remaining investment never moved forward because of rising energy costs and contract disputes.

Local analysts criticized the 31.5 kV toll fees and said these charges increased operational expenses. They argued that a shift to 150 kV tolls could save money and remove the need for extra structures. Tether agreed with this view and pushed for a revised power purchase agreement. Yet the talks stalled, and the company faced mounting financial pressure. The unpaid bills and stalled tariff negotiations made the business environment too uncertain.

Reports in September revealed the first signs of an exit plan. Local media noted that UTE cut power to the facilities after Tether failed to settle a $2 million bill for May. Other debts from local projects added up to nearly $4.8 million, according to those reports. Tether disputed these figures and said the local operating firm was still in talks with the government. The company stated that it remained committed to finding a way forward in the region.

Tether denies quitting Crypto Mining Project in Uruguay

Tether, the company that makes the USDT stablecoin, denies reports that it abandoned a $500 million crypto mining project in Uruguay due to a $4.8 million electricity debt pic.twitter.com/RWAiKh4AIx

— cryptoalpha.id (@cryptoalphaindo) September 23, 2025

Regional Mining Pivot Continues Despite Uruguay Setback

Tether is currently examining alternative markets in South America as it reformulates its mining strategy. Paraguay and El Salvador remain appealing to miners with cheaper electricity and less rigid energy regulations. Tether had already stated it would build plants in both nations because they are cheaper and have more predictable tariffs in large-scale mining.

Company officials indicated that they continue to see the long-term potential of Latin America. They also indicated that the company will still review its Uruguay stance. The company also indicated that it is contributing to the current negotiations between the local operator and government officials. Tether will be keeping a close eye on the developments as it tweaks its mining roadmap.