Paraguay Issues Warning Regarding Rise of Illegal Bitcoin Mining Operations

Paraguay’s reputation as a nation with low power costs for bitcoin mining negatively impacts the electric grid, which might undermine the country’s capacity to maintain a stable power system. The National Power Administration, ANDE, reported on October 28 that the recent rise in bitcoin mining has significantly increased the department of Alto Parana’s power usage, with several companies connecting to the grid illegally.

This has forced the group to increase monitoring in the area and scale up supervision activities to discover hidden links on the border with Brazil, said Miguel Angel Baez, technical director of the ANDE organization. Baez claims that when the business notices and disconnects an activity, two others start up. According to reports, these clandestine activities may require as much electricity as an apartment building does in a day.

The region has had this problem before. Some miners who had committed crimes involving power had their power disconnected in the past by the National Power Administration. Alfredo Arguello, the director of the East Regional Management Division, claimed in August that during monitoring inspections, they had found abnormalities such as direct connections, bypass connections, and changed power meters. These irregularities caused losses that exceeded $400,000 per month.

The National Power Administration objected to the charge outlined in a proposed cryptocurrency bill, which specified the maximum cost to be only 15% more than that collected from other comparable enterprises due to the circumstances in the sector. The group declared at the time that it would support a potential veto of the bill in light of that consideration and suggest a new set of electricity fees.

President Mario Abdo rejected the cryptocurrency law on September 2 because it would have improved the regulation of the bitcoin mining sector and was an energy-intensive enterprise with no need for employees. On September 30, the Paraguayan Senate overruled the veto, and Congress moved to enact the legislation without the approval of the President.

Despite this, bitcoin mining businesses continue to find Paraguay a desirable location. Pow.re, a bitcoin mining business, declared on October 14 that it has begun building two mining facilities in the nation that will control 12 MW of hydroelectric electricity.

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