- Paraguay aims to significantly cut electricity theft from illegal cryptocurrency mining, reducing electrical losses from 28% to 15% within a decade.
- Joint operations by ANDE and prosecutors have led to the discovery and dismantling of unauthorized mining operations, seizing hundreds of mining rigs.
In response to escalating energy losses primarily due to illegal cryptocurrency mining, Paraguay has unveiled a robust strategy aimed at halting this unauthorized activity.
The National Electricity Administration (ANDE) of Paraguay has publicized its master management and control plan for 2024-2034, which centers on reducing the current electrical loss rate from an alarming 28% to an ambitious 15%.
This strategy involves substantial investments totaling $359 million between 2025 and 2028, directed towards upgrading infrastructure and technological advancements to boost the efficiency of power supply and combat energy theft.
Illegal cryptocurrency mining has been pinpointed as a primary culprit for energy losses in the nation. This finding has propelled the authorities to enforce stringent measures, including penalties of up to ten years in prison for those stealing electricity from transmission lines or storage hubs for the purpose of mining digital currencies.
This legal framework underscores the government’s determination to address the root causes of power inefficiencies.
Ongoing Enforcement Efforts
The persistence of illegal mining operations has necessitated continuous enforcement actions. A notable operation was carried out by ANDE in collaboration with the local prosecutors on November 30 in the Itapúa department.
The operation uncovered an illegal connection, allegedly used for cryptocurrency mining, after detecting unusually high loads on a 23,000-volt input line. Upon inspection, an illegal medium-voltage bypass was found, equipped with immediate load measurements.
This raid resulted in the seizure of 163 mining devices, which were not specified by model. The damage associated with the electrical theft from this operation is estimated at approximately 665 million Paraguayan GuaranÃs, equivalent to around $85,000.
Such enforcement actions are part of a broader initiative to curtail the pervasive issue of power theft linked to cryptocurrency mining.
In a separate but related incident earlier in the month, another raid was conducted by ANDE in the Natalio district within the Itapúa department.
Although the technicians initially found that the electrical consumption of the mining farm was within contractually agreed parameters, the facility was not registered for energy use for cryptocurrency mining. Consequently, the operators were given 48 hours to regularize their energy usage.
As Paraguay continues to fortify its measures against illegal mining, the increased energy costs and frequent raids have driven some mining operations to cease or relocate to more mining-friendly jurisdictions, such as Brazil.
This landscape forms part of a larger narrative where countries globally are grappling with the regulatory challenges posed by the burgeoning cryptocurrency mining industry, which has profound implications for national energy policies and regulatory frameworks.