Paraguay seizes 2,738 ASICs as power theft crackdown continues

Power-intensive crypto mining is controversial in Paraguay, where an attempt at crypto regulation was vetoed because of it.

Property containing 2,738 crypto mining units was seized in Salto del Guairá, Paraguay, after the National Electricity Administration (ANDE) detected an unmetered power connection in the area. There is a bill before the country’s senate to ban crypto mining and other crypto-related activities pending comprehensive legislation and assurances from the national power supplier.

ANDE used artificial intelligence and power distribution analysis to zero in on the electricity theft, which it estimated was worth 1.1 billion guarani ($146,000) per month. Five transformers were also seized on the property. Four criminal charges may be brought against the operators of the illegal operation.

At least two other actions against illegal crypto farms — one in Salta del Guairá — were carried out in Paraguay in May, although those raids had much more modest results. All the government actions involved multiple agencies, including the National Police.

Paraguay was considered a crypto mining haven due to its abundant hydropower supply from the Itaipu Dam power plant on the Paraná River. The country lacked a legal base for crypto operations, however. Regulatory legislation was introduced into Congress in 2021 and passed by the Senate in July of the following year.

Crypto legislation vetoed, mining ban threatened

Then-president Mario Abdo Benítez vetoed the bill, specifically objecting to the provisions on mining, which incentivized the activity. Even with the country’s power resources, crypto mining could take away from rapidly developing national industries, he said. An attempt to overturn the veto in the legislature failed.

Related: Paraguay’s proposed Bitcoin mining ban could cost $200M a year

The crypto mining industry continues to operate in Paraguay, but has been threatened by a bill proposed in April that would impose ban on “the creation, conservation, storage and marketing of virtual assets or crypto assets, cryptocurrencies and the installation of cryptomining farms on Paraguayan territory.”

The ban would be in force for 180 days or until comprehensive legislation was passed and ANDE could guarantee a sufficient power supply. The bill mentions the rampant illegal mining occurring in the country. The temporary ban bill has been sidelined, but debate is officially considered “postponed.”

Paraguay remains home to major mining facilities. Bitfarms and Marathon Digital have mining operations there. In November, Tether announced plans to build mining facilities there, too.