‘Vulture Contracts’ Affecting Bitcoin Mining Development in Paraguay

Bruno Vaccotti, Head of Public Affairs of Penguin, a bitcoin mining company, has referred to the existence of what he called “vulture contracts,” and its effects on developing mining operations in Paraguay. Vaccotti stated that large amounts of energy have been assigned through these contracts that have not been taken advantage of and are blocked for utilization.

Vulture Contracts Limiting Bitcoin Mining Operations Development in Paraguay

The bitcoin mining industry in Paraguay is reacting to the involvement of the National Power Administration (ANDE) in the closure of several illegal bitcoin mining farms. Bruno Vaccotti, Head of Public Affairs of Penguin, a bitcoin mining company, revealed thee existence of “vulture contracts,” which slow the development of bitcoin mining operations in Paraguay.

In a radio interview, Vaccotti recognized that illegal mining operations hurt ANDE’s income, but he criticized the narrative promoted by the institution regarding bitcoin mining activity. He stated that Penguin paid $850,000 monthly in power bills, almost 50% of the two million that is lost to illegal mining operations according to ANDE’s claims.

‘Vulture contracts,’ agreements signed between the ANDE and other undisclosed bitcoin mining third parties, affect power availability for opening new farms and originate losses for the nation. Vaccotti declared that these contacts, involving large quantities of energy, are often signed by foreign investors, who go outside the country and speculate with these.

The energy assigned to these parties gets blocked for these operations, hurting the possibility of real bitcoin mining investors taking advantage of the energy involved. Vaccotti stresses this might have a larger impact than the illegal activities ANDE is chasing.

Vaccotti assessed that if ANDE doesn’t penalize these actions more companies will sign these contracts. Vaccotti stated:

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.

Paraguay has embarked on a war against illegal bitcoin mining operations, having detected and disconnected several farms that stole power from the country’s electric grid.