Paraguay's Alto Paraná province has shut down two unlicensed Bitcoin mining sites within a week, seizing a total of 35 devices. The National Electricity Administration, National Police, and Prosecutor's Office conducted joint operations targeting illegal connections and resident complaints, not licensed industrial mining sites.

On September 17, the electricity bureau discovered a property in Minga Guazú connected directly to the public network without a meter, seizing 10 ASIC miners and charging for unmetered electricity, operational fees, and fines totaling approximately 176.16 million guaraníes (about $30,000) under Law No. 966/64. The prosecuting attorney is from the 9th Criminal Court of Ciudad del Este, case number 15144/26. The electricity bureau stated that such high-load illegal connections could overload transformers and damage distribution lines.

On September 12, police responded to noise complaints in the Remansito community of Ciudad del Este, entering homes with the electricity bureau and seizing 25 devices. The total of 35 devices is significantly smaller than the industrial mining sites connected to the grid in the country. The House of Representatives passed a resolution on September 16, requiring the electricity bureau to submit a report within 15 working days detailing the actual electricity usage, electricity prices, related income, and law enforcement situations for crypto mining sites, assessing their impact on grid stability and the economy.

Paraguay has long benefited from low electricity prices from the Itaipu hydroelectric plant. On the licensed side, operators like HIVE run at the hundred-megawatt level in areas like Yguazu and Valenzuela; in recent years, the electricity bureau has charged miners a special electricity rate and has previously handed over seized mining machines to partners for trial operations and early sales of output to hedge against electricity costs. Illegal sites draw electricity from residential or medium-voltage lines, effectively hiding industrial loads within residential electricity accounts, with fines calculated based on the number of days of electricity theft, not according to cryptocurrency prices.

The market mechanism is disrupted by law enforcement against electricity price arbitrage. Buyers are small miners seeking low-cost computing power; sellers are the grid and surrounding users who bear the costs of transformer overloads. Funds flow from "saved electricity costs" to fines and seized equipment. Beneficiaries are the electricity bureau and Congress, which need to understand the real load curve; those under pressure are the small workshops relying on illegal connections to maintain shutdown prices. The 35 machines do not change the overall network difficulty but provide real-world samples for electricity price hearings. The driving factors of the incident are electricity theft and noise, not changes in Bitcoin block rewards.

Source: Public Information