Paraguay Considers Harsher Penalties for Illegal Crypto Mining with Up to 10 Years Imprisonment and Equipment Confiscation

Paraguay Considers Harsher Penalties for Illegal Crypto Mining with Up to 10 Years Imprisonment and Equipment Confiscation
Photo by Arvid Froese / Unsplash

Paraguay's government has recently introduced a legislative bill aimed at tightening penalties for the theft of electricity, specifically targeting illegal cryptocurrency mining operations. This move seeks to protect the interests of the National Electricity Administration (ANDE) and could result in severe repercussions for those caught mining cryptocurrencies unlawfully.

The bill, submitted to the Paraguayan Congress, proposes a maximum imprisonment term of ten years if approved. It also includes provisions for the confiscation and subsequent sale of equipment used in these illicit mining farms. These steps are seen as essential to safeguarding the country's energy resources and the rights of its citizens.

Paula Carro, a spokesperson for the President of Paraguay, emphasized the urgency of the bill's approval, stating that it was submitted on an "urgent basis." Carro highlighted that the primary aim of this legislation is to protect ANDE’s interests, an organization currently facing significant challenges due to illegal mining activities.

In a follow-up interview, Felix Sosa, head of ANDE, explained that the new bill would help stimulate the country's development and protect the interests of the general populace. On May 19, 2024, ANDE reported the seizure of 396 ASIC mining machines from a local official accused of corruption. These machines, valued at $120,000, were confiscated in connection with another case but underscored the necessity for the new legislation. The disclosure comes at a time when the national debate intensifies over the future of cryptocurrency mining in Paraguay.

The situation with miners in Paraguay has been a topic of intense discussion. In early April 2024, a bill was introduced in the Paraguayan Congress that called for a complete ban on this type of activity until a proper regulatory framework could be established. This initial proposal faced backlash from the cryptocurrency lobby, which suggested an alternative: selling electricity to miners at a price higher than the export rate.

Paraguay has the potential to become a major mining hub in Latin America due to its energy capabilities. This potential makes the current legislative discussions all the more crucial as they could set significant precedents for how the country balances technological advancement with economic and environmental sustainability.

The ongoing legislative efforts demonstrate Paraguay's commitment to regulating the cryptocurrency mining industry. The government aims to strike a balance between enabling technological growth and ensuring that it does not compromise the energy resources needed by its citizens. The outcome of this legislative process will likely impact the regional cryptocurrency landscape and could serve as a model for other nations grappling with similar issues.