Vulture Contracts Hindering Bitcoin Mining Progress in Paraguay
The bitcoin mining sector in Paraguay is facing challenges due to the National Power Administration (ANDE) cracking down on illicit bitcoin mining facilities. Bruno Vaccotti, the Head of Public Affairs at Penguin, a prominent bitcoin mining firm, has shed light on the presence of “vulture contracts” that are impeding the growth of bitcoin mining ventures in Paraguay.
During a recent radio interview, Vaccotti acknowledged that illegal mining activities were impacting ANDE’s revenue. However, he criticized the narrative being pushed by the institution regarding bitcoin mining operations. According to Vaccotti, Penguin is paying a hefty $850,000 monthly in electricity bills, nearly half of the alleged $2 million lost to illegal mining operations, as per ANDE’s reports.
These “vulture contracts,” which are undisclosed agreements between ANDE and certain bitcoin mining entities, are hampering the availability of power for establishing new mining facilities and resulting in financial losses for the country. Vaccotti revealed that these contracts, involving substantial energy allocations, are often inked by foreign investors who take advantage of the situation by operating outside Paraguay.
The energy earmarked for these undisclosed parties remains tied up, hindering legitimate bitcoin mining investors from utilizing the available resources. Vaccotti emphasized that this issue could have a more significant impact than the illicit activities that ANDE is currently pursuing.
Vaccotti warned that unless ANDE takes stricter actions, more companies might enter into such contracts in the future. He urged for action, stating, “Bid, do something, but take action. Not only are these contracts going unfulfilled, but Paraguay is also losing revenue due to reserved energy.”
Paraguay has intensified its efforts against illegal bitcoin mining operations, shutting down several facilities that were illicitly tapping into the country’s power grid.
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