Paraguay’s Crackdown on Illegal Bitcoin Mining: Proposed 10-Year Jail Terms
Illegal Bitcoin Miners Face Harsh Penalties
In a significant move to curb the rampant problem of illegal Bitcoin mining, the government of Paraguay is introducing legislation that could result in prison sentences of up to 10 years for offenders. The proposed bill, sent to parliament for urgent approval, aims to deter individuals involved in the illicit activity that has caused substantial energy losses for the country.
Protecting National Electricity Administration
The government’s spokesperson, Paula Carro, has emphasized the need to safeguard the state-owned National Electricity Administration (ANDE). Illegal miners have been illegally tapping into the grid, stealing significant amounts of energy. This has posed a threat to ANDE’s operations and raised concerns about potential blackouts.
The proposed law empowers the Paraguayan police and prosecutors to confiscate mining equipment from illegal operators. ANDE is granted the authority to request seizures, and any confiscated equipment can be sold, with the proceeds benefiting the state-owned firm.
Surplus Hydroelectric Power and Illegal Connections
Paraguay has been a popular destination for Bitcoin miners due to its abundant hydroelectric power resources, which miners prefer because of their cost-effectiveness. However, the recent surge in illegal mining operations has prompted the government to take action. Miners have sought to create unauthorized connections to the grid, leading to overloads and other issues for power providers.
Police Crackdown and Parliament’s Response
In response to the growing problem, the Paraguayan police have launched a crackdown on illegal mining operations. Since the beginning of 2024, officers have seized over 5,000 ASIC miners. The electricity providers have been vocal about the overloads and other issues they face due to the illegal activities.
The parliament has also taken notice of the issue. At least 14 lawmakers have backed a private member’s bill that proposes a temporary ban on Bitcoin mining until the problem of illegal mining is resolved. However, this bill is still in the committee phase, and its progress is uncertain.
Government’s Bill and Private Member’s Bill
The government’s bill, if passed, would likely lead to the abandonment of the private member’s bill. The government’s bill has the support of the Public Ministry, ANDE, and the Paraguayan Judiciary.
Carro has highlighted the significant financial losses incurred by Paraguayan power providers due to illegal Bitcoin mining. The government believes that the harsh penalties proposed in the bill will serve as a strong deterrent and help curb the illegal activities.
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