$120 Million Lost Overnight! The Most Stable Giant in Crypto Crashes in South America

Author: Heart of Computing Power

On July 25, 2025, an engineer from Uruguay's national electricity company (UTE) pulled the power switch.

In an instant, the Bitcoin mining farm in the rural area of Florida province, which had been operating for two years, fell silent. This mining farm, which had an investment of about $120 million, came to a halt, leaving 30 out of 38 local employees without jobs.

Once a highly anticipated green energy benchmark project in South America, it ultimately ended with an unfulfilled new contract and nearly $5 million in unpaid bills, marking a regrettable conclusion.

1. Heading to South America with $120 Million

Tether's venture to build a mining farm in Uruguay initially seemed like a win-win arrangement.

In May 2023, Tether, the world's largest stablecoin issuer, announced its entry into Uruguay with great fanfare.

The reasoning was sound: Uruguay boasts a renewable energy power structure of 98%, primarily relying on hydropower and wind power, ensuring a stable grid and a friendly regulatory environment.

At that time, Tether planned to collaborate with the local licensed company Microfin to build two mining sites in Florida province.

Former contractors estimated that Tether later spent about $60 million at each site, totaling around $120 million.

For Tether, this was not just about mining; it was a crucial step in investing profits into real energy.

The company was flush with profits, reporting approximately $6.2 billion for the entire year of 2023, and was actively diversifying into energy, AI, and other fields.

When the project first launched, everything ran smoothly. According to former contractors interviewed by Reuters, both sites were producing normally and generating revenue, with the local team expanding to 38 members.

2. A Power Outage Stalemate Triggered by a Number

However, good times did not last long, as both parties soon hit a snag over the core issue of power supply.

The root of the conflict lay in a specific number in the electricity contract. Tether interpreted the power supply amount in the contract as a "minimum supply amount," believing that as the mining farm expanded, they could continue to apply for more power.

However, UTE maintained that the number was a "maximum limit" that could not be exceeded.

Yet Bitcoin mining machines require 24/7 operation.

As the mining farm expanded and electricity demand increased, both sites began to frequently experience power restrictions, sometimes going days without sufficient power, directly resulting in losses in computing power revenue.

By the end of 2024, tensions between the two parties had already surfaced.

In 2025, with the election of leftist President Yamandú Orsi in Uruguay, the management of the electricity company changed, adopting a tougher stance in negotiations.

The communication mechanism broke down, and the trust foundation for cooperation began to erode.

3. Complete Withdrawal in Five Months

After the trust was shattered, the project quickly slid toward an irreversible conclusion.

In May 2025, Microfin stopped paying electricity bills.

Then in June, Microfin officially issued a notice to terminate the contract with the electricity company.

According to internal briefings reviewed by Reuters, the electricity company had actually prepared a revised contract in an attempt to salvage the project, but Tether representatives did not attend the signing ceremony.

By July 25, 2025, the electricity company officially cut off power supply.

Local media "El Observador" reported that at this point, Microfin's debts had approached $5 million, with monthly electricity bills reaching about $2 million, and the amount owed had exceeded the initial guarantee.

On November 25, 2025, Tether officially notified the local labor department of its cessation of operations, and the television station Teledoce subsequently confirmed that 30 out of 38 employees were laid off.

By December 2025, Microfin had settled all outstanding debts.

4. When "Green" Does Not Mean "Cheap"

The exit from this incident serves as a wake-up call for all companies making heavy asset investments overseas.

First, there is the reality of costs.

Uruguay's electricity is indeed green, but it does not hold a significant advantage in global mining electricity price comparisons.

Especially after Bitcoin's halving in 2024 (reducing block rewards from 6.25 BTC to 3.125 BTC), the profit margins across the industry were significantly compressed, and the high electricity price disadvantage, previously masked by "green sentiment," would be quickly magnified.

Secondly, there is the certainty of rules.

When Tether entered Uruguay, it was also attracted by the renewable energy and political stability here.

However, the management of public utility companies changes with government transitions, and negotiation strategies shift accordingly, which is not uncommon in Latin America.

For heavy asset projects that require long-term stable power supply, policy continuity is often more difficult to predict than the electricity price itself.

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Although a loss of $120 million is entirely bearable for Tether, which has annual profits exceeding $10 billion and an investment portfolio over $20 billion, and its layouts in places like El Salvador continue, it clearly illustrates a business principle.

In the world of heavy asset operations, no matter how great the computing power, it must be built on clear contractual consensus and real cost advantages.

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