Paraguay’s proposal to jail illegal Bitcoin miners for up to 10 years

adminMay 30, 2024

The Paraguayan government is urging the National Assembly to pass a bill that could see illegal Bitcoin (BTC) miners sentenced to up to 10 years in prison. Earlier this month, presidential spokeswoman Paula Carro announced that the bill had been submitted to parliament with a sense of urgency.

Heavy penalties for illegal Bitcoin miners

Carro explained that the proposed law aims to “punish” illegal mining activities with severe prison sentences. According to Criptonoticias, the bill also gives Paraguayan police and prosecutors the power to confiscate mining equipment from unauthorized operators. The bill is designed to protect the National Electric Power Corporation (ANDE), which has been severely impacted by massive amounts of energy being stolen by illegal Bitcoin mining operations.

The bill stipulates that courts can sentence anyone convicted of energy theft to up to 10 years in prison. ANDE could also request the seizure of mining equipment, which could then be sold and the proceeds given to the state-run electricity supplier.

Bitcoin Mining Activity Increases in Paraguay

Due to Paraguay’s abundant hydro energy resources, Bitcoin mining has experienced significant growth. These resources make it an attractive location for BTC miners. Despite efforts by lawmakers to regulate the industry, many miners have been connecting illegally to the power grid, causing overloads and other problems for power providers.

In response, law enforcement agencies have stepped up efforts to combat illegal mining activities. Since the beginning of this year, police have confiscated about 5,000 ASIC mining machines through various raids and seizures across the country.

Government crackdown on illegal mining

ANDE has been actively involved in 17 crackdowns on illegal Bitcoin and altcoin mining operations since early 2024. The crackdown has prompted legislative action, with at least 14 lawmakers supporting a private member’s bill seeking to temporarily ban Bitcoin mining until the problem of illegal mining is addressed. The operation has been resolved. However, the bill has not yet made it past the committee stage and may never reach a vote in the Legislature.

Once the government bill is approved, private lawmakers’ bills are likely to be put on hold. Carro noted that the government’s bill has the support of the Public Ministry, ANDE and the Paraguayan judiciary. She highlighted that Paraguay’s power suppliers have suffered millions of dollars in losses due to illegal Bitcoin mining.

Legislative and Judicial Support

The Paraguayan government is pushing for rapid legislative action to address the problems caused by illegal Bitcoin mining. The proposed legislation reflects a joint effort between various government agencies to mitigate the impact of unauthorized mining on the national power grid and ensure the sustainability of the country’s electricity resources.

The Paraguayan government continues to fight illegal Bitcoin miners who steal electricity. Today, the administration announced through Presidential Spokesperson Paula Carro that it will send two bills to Congress that would seize the equipment and impose maximum fines. pic.twitter.com/Tbt7MVKby7
— Joaquin Morinigo 🇵🇾🏴‍☠️⚡️ (@criptoboi) May 17, 2024

Paraguay’s new cryptocurrency law

As we also reported, Paraguayan lawmakers recently convened to vote on legislation related to crypto assets. At this meeting, the bill received overwhelming support with 40 in favor and 12 against. The new law focuses on giving regulators the necessary powers to oversee companies providing cryptocurrency services. These regulatory bodies are responsible for issuing licenses, monitoring the activities of these companies, and ensuring compliance with established regulations.

Despite the crackdown on illegal mining, one of Paraguay’s main motivations for pushing for cryptocurrency regulation is its desire to maintain its status as a hub for foreign miners. This attractiveness is largely due to the country’s low electricity rates, which have remained among the lowest in the region for the past five years. Paraguay aims to attract and retain these mining operations by establishing a regulatory framework.

The proposed legislation outlines requirements for both new and existing industrial miners wishing to operate in the country. These miners must obtain permits and approvals before starting work. The bill also targets individuals and businesses seeking to promote cryptocurrency services and ensures that all participants in the market are held to the same standards.

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