Paraguay Gov’t Looks to Jail Illegal Bitcoin Miners for ‘Up to 10 Years’

The government of Paraguay will ask lawmakers to approve a bill that proposes jailing illegal Bitcoin (BTC) miners for up to 10 years.

The presidential spokesperson Paula Carro told reporters on Friday May 17 that the government has sent the bill to parliament “as a matter of urgency.”

10 Years in Jail: Illegal Bitcoin Miners Face Longer Prison Terms

Carro said that the bill seeks to “punish” illegal miners with “multiple years in prison.”

The draft law will also allow Paraguayan police and prosecutors to seize mining equipment from illegal operators.

Per Criptonoticias, Carro also said the bill “seeks to protect the state-owned National Electricity Administration (ANDE).”

She added that the “theft of large amounts of energy by illegal Bitcoin mining operators” was posing a “threat” to ANDE.

The terms of the bill allow courts to impose “a maximum sentence” of a decade in jail “for the crime of energy theft.”

The proposals also allow ANDE to ask police to seize mining rigs and sell these off, with the state-run firm to be “the beneficiary of the proceeds.”

El gobierno Paraguayo sigue dando batalla a los mineros ilegales de bitcoin que roban energía eléctrica. Hoy, el Poder Ejecutivo, a través de la vocera presidencial Paula Carro, anunció que enviará al Congreso dos proyectos de ley para incautar equipos y establecer penas de hasta… pic.twitter.com/Tbt7MVKby7

— Joaquin Morinigo 🇵🇾🏴‍☠️⚡️ (@criptoboi) May 17, 2024

Bitcoin mining has boomed in Paraguay, where lawmakers have fought to bring it into the legal sphere.

The country has considerable power resources that BTC miners find ideal – namely surplus hydroelectric energy.

However, in recent years, many Paraguay-based miners have sought to create illegal connections to grids.

And power providers have complained they are facing overloads and other issues.

Police have responded by launching a crackdown. Since the beginning of this year, officers have seized more than 5,000 ASIC miners.

The Yacyretá Dam, a major source of Paraguayan electrical power. (Source: Eby gov py [CC BY-SA 2.5])

Crackdown: Illegal Bitcoin Miners Face Police Action

ANDE has taken part in some 17 raids on illegal BTC and altcoin mining farms nationwide since the start of 2024.

This has also led to a flurry of activity in parliament. At least 14 lawmakers have backed a private member’s bill that would effectively ban Bitcoin mining in the country.

The bill proposes a “temporary” block on BTC mining “until the problem of illegal mining is resolved.”

However, this bill has not yet cleared the committee phase, and it is not certain that it will reach the house for a vote.

Should the government succeed with its own bill, this private member’s bill will likely be shelved.

Paraguay’s central bank kept its benchmark interest rate unchanged at 6%, citing rising uncertainty about oil prices and the timing of US rate cuts. https://t.co/nUW8lF2fSW

— Bloomberg Markets (@markets) April 22, 2024

Carro that the government’s bill has the backing of the Public Ministry, ANDE, and the Paraguayan Judiciary.

She concluded that illegal BTC mining “has resulted in millions of dollars worth of losses” for Paraguayan power providers.