Tether, the issuer of USDT, the largest stablecoin globally, has recently announced the cessation of its Bitcoin mining operations in Uruguay. This decision stems from rising energy expenses and a disputed debt of $4.8 million with the state power company UTE.

“We can confirm that we have paused operations in Uruguay,” stated a spokesperson from Tether.

Weeks prior, Tether had refuted earlier claims about its plans to exit Uruguay following the debt dispute with UTE in September.

According to reports from local news agency El Observador, Tether has informed Uruguay’s Ministry of Labor about the suspension of its mining activities, leading to the layoff of 30 employees.

What Led to Tether’s Decision in Uruguay?

Tether had initiated its “sustainable Bitcoin mining operations” in Uruguay in May 2023, in partnership with a local licensed company.

At that time, Paolo Ardoino, who is now the CEO of Tether, emphasized the company’s pledges towards ecological and responsible Bitcoin mining by utilizing Uruguay’s renewable energy resources.

Despite not disclosing its local partners, some industry reports have suggested links to UTE and a local commercial operator called Microfin.

In September, there were reports that Tether was retreating from its planned $500 million investment in UR mining, reportedly due to an inability to pay a $2 million electricity bill owed to UTE and another $2.8 million for other local projects.

Tether confirmed its financial obligations but denied plans to withdraw from Uruguay, asserting it is engaged with the government to rectify the discrepancies.

Related: Tether’s gold reserves analysis

From the anticipated $500 million investment, it has been reported that Tether has already allocated at least $100 million to mining operations and $50 million for infrastructure.

Tether has neither confirmed nor denied these figures, stating, “We are committed to long-term initiatives in Latin America, especially those that utilize renewable energy. We are still assessing the best way forward for Uruguay and the broader region.”