Paraguay steps up action against illegal crypto mining operations

The government of Paraguay is preparing to take strong action against illegal crypto mining operations. In a meeting held last week between ANDE, the National Energy Administration, the Supreme Court and the Ministry of Justice, it was agreed to accelerate several actions to quickly tackle illegal mining operations.

Paraguay prepares to fight against illegal cryptocurrency mining

The three institutions have established an interinstitutional partnership that will allow the Ministry of Justice to easily deal with these cases, by including various aspects that specify the prosecution and punishment of the actors in the theft of electrical energy.

Furthermore, Supreme Court President Dr. Luis María Benítez Riera, that the country’s courts will deal with these cases quickly, with guarantees that the right to a fair trial would be followed.

Paraguay’s popularity due to relatively low energy rates has hurt the country since 2022, when ANDE issued warnings about multiple illegal crypto mining operations that were siphoning energy from the grid without paying. At the time, ANDE estimated these losses at $400,000 monthly.

This, and the government’s unfavorable opinion of the activity, caused the government to approve increases of up to 50% on energy tariffs collected from miners, who complained about the viability of these activities following this decision.

The Paraguayan justice system reported that it has received 60 energy theft complaints linked to crypto mining since 2019. In these cases, 43 interventions have been completed, which affected the quality of electrical energy services and caused “serious material damage” to ANDE.

Nevertheless, companies such as Bitfarms and Pow.re have chosen Paraguay as a hub to establish and expand their mining operations, driven by the country’s cheap green hydroelectric energy sources. It often happens that mining operations change locations: for example, many Chinese miners have recently moved to Ethiopia.