Paraguay Wants to Jail Illegal Bitcoin Miners for Up to 10 Years as Local Mining Booms

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As a seasoned crypto investor with a deep understanding of the industry, I’m closely monitoring the situation in Paraguay regarding illegal Bitcoin mining and the proposed legislation. The government’s efforts to protect its power resources from illegal miners stealing electricity is understandable, but it’s important to consider the potential economic benefits that could come from regulating and taxing the activity instead of outright banning it.

The Paraguayan government aims to have lawmakers approve a new legislation imposing jail terms of up to ten years for individuals conducting illegal Bitcoin mining operations. Spokesperson Paula Carro made this announcement to journalists on Friday, revealing that the proposed bill has already been submitted to parliament.

Paraguay to Jail People behind Illegal Mining to Protect Power Resources

The Executive Branch is proposing that Congress grant them the authority to seize mining equipment used in illegal Bitcoin mining operations, in conjunction with the lengthy prison sentences currently imposed. This includes electrical transformers, ASIC miners, and other relevant equipment. According to Carro’s statements, this matter is being handled with great importance by the government.

Carro revealed that the administration, specifically ANDE in Paraguay, is under threat from unlawful Bitcoin mining operations that siphon off enormous amounts of electricity. This illicit activity reportedly puts a significant strain on power supplies, impacting both distribution and consistent usage. The government intends to amend Article 173 of the Penal Code to impose a maximum sentence of ten years in prison for such power theft offenses.

Paraguay has been cracking down on illegal Bitcoin mining operations for some time now. In September, the country imposed a fine of $5,000 on a Bitcoin miner, which consisted of unpaid electricity bills and ANDE’s intervention costs as per Paraguayan Law 966. The first legal conviction against two Bitcoin miners was secured by Paraguay in March, and in April, the authorities shut down a mining farm that reportedly cost the government over $1.3 million.

Paraguay Miners Could Benefit from Surplus Energy

Last month, legislators proposed a bill to prohibit Bitcoin mining nationwide for a period of 180 days or until new regulations were enacted. This ban, as per estimates, could potentially cost the country over $200 million annually, according to Jaran Mellerud, co-founder and chief mining strategist at Hashlabs Mining.

allowing licensed miners to sell their excess energy instead of facing a complete ban.

As a crypto investor, I find Paraguay’s mining industry particularly appealing due to its abundant surplus power. The country is home to numerous large hydroelectric power stations that generate an excess of electricity. While Paraguay currently sells this extra energy to neighboring countries like Brazil and Argentina, there are plans to prioritize the sale to licensed miners instead. In fact, Paraguay was the world’s fourth-largest net energy exporter in 2022, following France, Germany, and Canada. This surplus energy, combined with favorable regulations, makes Paraguay an attractive destination for crypto mining operations.

Unfortunately, there’s disagreement over the idea of solely selling excess energy to Bitcoin miners. Some people and criticisms from the political sphere argue that the government should consider giving this extra energy to less fortunate families instead.

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2024-05-20 13:03