Paraguay Starts Crack Down on Illegal Bitcoin Mining

Paraguay proposes harsh penalties and equipment seizure to combat unauthorized bitcoin mining, threatening financial stability.
Paraguay Starts Crack Down on Illegal Bitcoin Mining

Key Takeaways

  • Paraguay proposes harsh penalties and equipment seizure for illegal bitcoin mining.
  • Over 5,000 ASIC miners confiscated in 17 government interventions since 2024.
  • Current legal tools are inadequate to address the financial strain on ANDE from energy theft.

The Paraguayan government has introduced a bill targeting unauthorized bitcoin mining to address rampant electricity theft.

On May 17, presidential spokesperson Paula Carro announced the proposal, which includes severe penalties and equipment seizure to protect the National Electricity Administration (ANDE) and ensure fair competition in the energy sector.

The bill aims to amend Article 173 of the Penal Code, incorporating provisions for seizing assets associated with illegal bitcoin mining.

The proceeds from the sale of confiscated equipment would benefit ANDE.

Carro emphasized the urgency of the bill, stating it seeks to impose up to 10-year prison sentences for those stealing energy from transmission lines or storage ports.

Strengthen electricty system

Félix Sosa, president of ANDE, highlighted the importance of these measures in strengthening Paraguay’s electrical system.

He noted significant interest from international investors in energy projects, suggesting longer license and contract terms with ANDE to attract investment and maintain competitive rates.

Paraguay’s surplus hydroelectric energy has made it a prime location for bitcoin miners, but illegal connections have strained power providers.

Since early 2024, ANDE and the government have conducted 17 interventions against illegal mining, confiscating over 5,000 ASIC miners and terminating over 50 MWh of unauthorized connections.

Sosa pointed out that the current lack of legal tools to punish energy theft has harmed ANDE’s finances and created unfair competition.

Temporary ban

The legislative push has ignited parliamentary activity, with at least 14 lawmakers backing a private bill to temporarily ban Bitcoin mining until illegal operations are resolved.

This bill affects 50 legally operating mining companies.

However, if the government’s proposal succeeds, it will likely overshadow the private member’s bill.

Carro highlighted broad support for the government’s initiative from the Public Ministry, ANDE, and the judiciary as Paraguay strives to create a more regulated environment for bitcoin mining.

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