Penguin Exec Blames ‘Vulture Contracts’ for Slowing Bitcoin Mining in Paraguay

Bruno Vaccotti, Penguin’s Head of Public Affairs, has raised concerns about “vulture contracts” affecting the bitcoin mining industry in Paraguay. In a recent radio interview, Vaccotti stated that a large amount of energy is allocated through these contracts but is not being used.

An Industry Held Back

Vaccotti explained that power limitations are included in these agreements signed between the National Power Administration (ANDE) and third parties. This situation hinders the industry’s growth, preventing Bitcoin miners from accessing the energy they need to operate. Moreover, Vaccotti highlighted that untapped foreign investors often tie up this power, causing significant economic losses to the country.

Financial Strain on Legitimate Operations

While recognizing that illegal mining operations harm ANDE’s revenue, Penguin pays $850,000 monthly in power bills. Vaccotti pointed out that the financial impact of these inactive contracts might be more damaging than the illegal activities currently being targeted by ANDE.

Vaccotti also stated that,

Our bill per month for the ANDE is 850,000 dollars, that is, with 5 companies we are already supplying those 2 million that ANDE cries and add that there are 45 more that are contributing more value and building infrastructure. substation that cost us 13 million dollars, an operation center of almost 2 million dollars, we exceeded 100 million dollars of infrastructure in Hernandarias.

Vaccotti urged ANDE to take substantial action against these contracts to prevent further misuse of Paraguay’s energy resources. He emphasized that unless these practices are penalized, more companies will engage in such speculative agreements, exacerbating the issue.

Moreover, Vaccotti stated that,

Bid, do what you want, but do something. Not only is a contract not being executed, Paraguay is also losing money because it has reserved energy.

Challenges and Efforts of Paraguay

Paraguay has been clamping down on illegal Bitcoin mining operations, disconnecting many farms that illegally link to the country’s electrical grid. However, Vaccotti believes that resolving the issue of “vulture contracts” is critical for the industry’s legitimate growth and the nation’s economic well-being.