The Paraguayan government has proposed a new bill aimed at addressing the rampant theft of electricity by unauthorized bitcoin miners.
On May 17, presidential spokesperson Paula Carro announced the government’s plan, which includes severe penalties and measures to confiscate mining equipment.
The illegal mining activities allegedly “threaten” the financial stability of the National Electricity Administration (ANDE). Carro said that the government has “urgently” sent the bill to parliament to protect its electrical infrastructure and ensure fair competition within the energy sector.
The proposed bill aims to amend Article 173 of the Penal Code to include specific provisions for the seizure of assets associated with illegal Bitcoin mining.
According to Carro, the proceeds from the sale of the confiscated mining equipment would benefit ANDE, further bolstering the national electricity provider.
Moreover, it introduces harsher penalties, with prison sentences for those found guilty of energy theft. Carro states:
“The project seeks to modify the penal code, establishing a custodial sentence of up to 10 years in prison for those who steal energy from transmission lines or storage ports at medium voltage or higher levels.”
Félix Sosa, the president of ANDE, emphasized the importance of these legislative measures in strengthening Paraguay’s electrical system.
He stated that many international investors are interested in developing energy generation projects in Paraguay. He suggested that the license and contract terms with ANDE should be longer than 15 years to attract investments and maintain competitive rates.
Paraguay is known for its abundant surplus hydroelectric energy, making it an attractive destination for bitcoin miners. However, multiple local miners have created illegal connections to grids in recent years, causing significant strain to power providers.
Since the beginning of 2024, ANDE, in collaboration with the government, has conducted 17 large-scale interventions against illegal mining operations. The police confiscated over 5,000 ASIC miners during these raids, resulting in termination of over 50 MWh of unauthorized connections.
Sosa pointed out that the current lack of legal tools to punish energy theft has been harmful to ANDE’s finances and has created unfair competition against entities that hold legal contracts with the administration.
The government’s legislative push has sparked a flurry of activity in the Paraguayan parliament. At least 14 lawmakers have backed a private member’s bill proposing a temporary ban on Bitcoin mining until the issue of illegal operations is resolved.
However, this bill affects 50 legally operating mining companies that have contracts ranging from 6 MW to 100 MW. If the government’s proposed bill succeeds, it is likely to overshadow the private member’s proposal.
Carro highlighted the widespread support for the government’s initiative from the Public Ministry, ANDE, and the Paraguayan judiciary.
As Paraguay continues its battle against illegal mining, these new legislative measures represent a step towards creating a more thoroughly regulated environment in the country.
