Tether's $120 Million Uruguay Mining Bet Just Collapsed
A nine-figure mining project died on one ambiguous contract clause. Here is the Reuters timeline, the honest read, and why this touches Tether's side bets, not the reserves behind USDT.
Key takeaways
- Tether has abandoned its roughly $120 million Bitcoin mining project in Uruguay after a power-contract dispute with state utility UTE, per a Reuters investigation.
- The core disagreement was one clause: Tether read the contracted electricity as a minimum that could grow; UTE read it as a hard maximum. The mines ended up without enough power for days at a time.
- Tether's local entity Microfin stopped paying its power bills in May 2025, UTE cut electricity on July 25, and Tether has now told Uruguay's labor authorities it is ceasing operations.
- Uruguay was meant to be the testing ground for mining expansion into Brazil, Paraguay and Argentina, drawn by a grid that runs mostly on renewables.
- This is a loss on a side bet, not the stablecoin: USDT reserves are separate, KPMG-audited, and Tether's core business remains highly profitable.
Tether's first big Bitcoin mining bet in South America is over. A Reuters investigation, reported by The Block, found that the roughly $120 million Uruguay project collapsed after a power-contract dispute with UTE, the state utility, left both facilities without enough electricity to run.
How a $120 million project dies on one clause
Per Reuters, Tether spent about $60 million on each of two sites, drawn by a grid that runs almost entirely on renewable energy. The contract with UTE contained a power figure that the two sides read in opposite ways: Tether treated it as a minimum that could scale up as the mines grew; UTE treated it as a ceiling. As demand rose, the sites sat underpowered for days at a time. By November 2024 the dispute was live inside UTE; a new government took office in March 2025 and appointed new utility directors; in May 2025 Tether's local entity Microfin stopped paying its electricity bills; UTE cut the power on July 25; and Tether has now told Uruguay's labor authorities it is ceasing operations and laying off most staff.
⚡️JUST IN: Tether’s $120 MILLION BTC mining bet in Uruguay has GONE DARK.
— Coin Bureau (@coinbureau) August 23, 2026
A dispute over unpaid power bills and a revised electricity contract led state-owned utility UTE to cut electricity to the sites in July 2025, per Reuters.
The shutdown derailed a project meant to anchor… pic.twitter.com/v2Fv8Dg29x
The honest read
This is a real loss and a self-inflicted one on both sides: a nine-figure industrial project should not live or die on an ambiguous clause. It also says something uncomfortable about counterparty risk with state utilities, which every miner from Texas to Paraguay already knows. What it is not is a stablecoin story. Mining is one of the side ventures Tether funds out of its profits, alongside AI, telecoms and agriculture. The reserves behind USDT are separate, majority US Treasuries plus gold and Bitcoin, and were counted bar by bar in the recent KPMG audit. Tether made $1.5 billion in profit last quarter; it can absorb a $120 million write-off. The lesson is about contracts, not solvency.
Why we cover the bad news too
Fizen is backed by a strategic investment from Tether, so we have every incentive to only show you the audit headlines and the record profits. That would be a highlight reel, not coverage. Your USDT in Fizen is self-custody, you hold the keys, and the honest picture of the company behind the stablecoin, wins and losses, is part of what you should know while holding it.
Frequently asked questions
What happened to Tether's mining project in Uruguay?
Tether invested roughly $120 million, about $60 million in each of two facilities, planning its first big Bitcoin mining operation in South America. A dispute with state utility UTE over how much electricity the contract guaranteed left the sites underpowered, bills went unpaid from May 2025, UTE cut power on July 25, and Tether has told Uruguay's labor authorities it is shutting the operation down.
What exactly was the dispute about?
One clause, read two ways. Tether understood the contracted power as a minimum supply that could be scaled up as the mines grew. UTE treated it as a maximum allocation that could not be exceeded. When demand rose past that line, the sites sat without sufficient electricity for days, which is fatal for a mining operation that only earns when machines are running.
Does this affect USDT or its reserves?
No. Mining is a venture Tether funds from its own profits, separate from the reserves backing USDT. Those reserves are majority US Treasuries plus gold and Bitcoin, and were verified in Tether's recent full KPMG audit. A failed infrastructure bet reduces Tether's side income; it does not touch the assets standing behind the stablecoin.
Why was Tether mining in Uruguay in the first place?
Uruguay's grid runs almost entirely on renewables, and Tether presented the country in 2023 as the beachhead for South American expansion into Brazil, Paraguay and Argentina. Cheap green power is the main cost driver in mining, which is also why disputes over power contracts can kill a project outright.
What does this mean for Fizen users?
Nothing operationally. Fizen is backed by a strategic investment from Tether, and your USDT balance in Fizen is self-custody: you hold the keys. We cover Tether news both ways, the KPMG audit and record profits as well as a $120 million write-off, because knowing your backer honestly is worth more than a highlight reel.
Hold USDT where you hold the keys
Fizen keeps your USDT in a self-custody wallet, spendable by Visa card and QR in 150+ countries, with travel eSIM and gift cards built in. Backed by a strategic investment from Tether. New accounts get welcome eSIM credit.
This is news coverage, not investment advice. Reporting as of 23 August 2026 from Reuters and The Block.
