Senators from Paraguay launched a bill to prohibit the creation, conservation, storage, and commercialization of virtual assets, as well as the installation of crypto mining farms.
On April 3, in the Senate of Paraguay, fourteen senators presented the proposal, including Colym Gregorio Soroka, Ever Federico, and Regina Lizarella.
Senators in Paraguay Want to Ban Crypto Mining
The senators argued that crypto miners “take advantage” of the country’s hydroelectric energy and have concentrated their activity in Alto Paraná.
“In [Alto Paraná], more than fifty premises dedicated to crypto-assets have been discovered until February 2024,” the senators stated in a translated version of the proposal.
Read more: Is Crypto Mining Profitable in 2024?
These cases harmed the National Electricity Administration (ANDE). ANDE’s losses reach 700 million guaraníes monthly. Annually, this amounts to 420,000 million guaraníes, or about $60 million.
The initiative insists on “clandestine connections” in crypto mining farms. They emphasized that this activity steals 28% of energy consumption through irregular connections at the mining farms.
Furthermore, the senators see no consumer protection, crime prevention, market stability, transparency, responsibility, or energy guarantee. Therefore, the initiative prohibits crypto mining until regulators establish rules for the activity.
The senators propose a legal regulation of crypto mining, which integrates legal, financial, and security implications. This includes establishing a clear framework for energy consumption and prices, ensuring equity in access to energy and electrical infrastructure, and improving its environmental impact.
The actions would come into force after approval, although the initiative went to the Justice and Labor Legislation Commission.
The lack of well-defined regulations presents a serious concern, as ANDE’s recent actions exemplified. On April 4, ANDE intervened in a crypto mining facility in Ciudad del Este, Alto Paraná, where an “irregular connection” was found. ANDE’s action has been described as a direct confrontation against the illegal activity.
Read more: Bitcoin Mining From Home: Is It Possible in 2024?
The simple installation caused monthly losses of 58 million guaraníes, and the activity is punishable by up to 3 years in prison.
Paraguay is an oasis for crypto mining despite its regulation. BeInCrypto reported that the famous Itaipu Dam on the Paraná River generates a staggering 14 gigawatts (GW) of electrical energy. That represents more than 99% of the country’s energy supply.
Additionally, the energy surplus has become the main attraction for Bitcoin miners. They find Paraguay a favorable place to establish their operations.
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