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Bitfarms Expands in Paraguay Amid Regulatory Uncertainty Secures 200 MW for Bitcoin Mining

Bitfarms Expands in Paraguay Amid Regulatory Uncertainty: Secures 200 MW for Bitcoin Mining

Bitfarms, a Bitcoin mining company listed on both Nasdaq and the Toronto Stock Exchange, is making significant strides in Paraguay despite regulatory uncertainties. The company has secured an additional 100 megawatts (MW) of electricity from Paraguay’s state-owned power company, Administración Nacional de Electricidad (ANDE). This move effectively doubles the hydroelectric capacity of Bitfarms’ facility under construction in Yguazú, eastern Paraguay, bringing the total to 200 MW.

Expansion Allows Cost Reduction and Increased Capacity

With this expansion, Bitfarms will manage a total of 528 MW, leveraging existing infrastructure to reduce costs per megawatt. The construction of the Yguazú farm, which began in March, has advanced quickly, with high-tension interconnections already established to ANDE’s substation. Bitfarms reports that the hydroelectric power will be generated at a cost of $0.039 per kilowatt-hour (kWh), a rate not subject to inflationary increases.

Ben Gagnon, Bitfarms’ Director of Mining, stated, “The additional 100 MW provides a cost-effective growth path through the first half of 2025 and does not affect our target of achieving a hash rate capacity of 21 exahashes per second by 2024.”

Challenges and Opportunities in Paraguay

Despite the progress, Bitfarms faces potential regulatory challenges as lawmakers in Paraguay consider banning mining activities related to cryptocurrency. However, the company remains optimistic about its operations in the region. Damián Polla, General Manager for LATAM at Bitfarms, highlighted the rapid progress of projects in Paraguay, facilitated by the expansion of infrastructure at the Paso Pe and Yguazú parks.

Local news reported in July 2023 that construction had begun on two new mining farms in Paraguay, one in Villarrica and the other in Yguazú. These developments underscore Paraguay’s growing importance in the industry, driven by its favorable geographical conditions and abundant hydroelectric resources.

Bitfarms’ Global Expansion and Legal Challenges

Bitfarms operates additional Bitcoin mining facilities in the United States, Canada, and Argentina. The company plans to invest approximately USD 240 million to upgrade its mining equipment following the halving, aiming to increase its hash rate capacity to 21 exahashes per second by 2024.

However, Bitfarms is also navigating a legal controversy involving its former CEO, Geoffrey Morphy, who recently filed a $27 million lawsuit against the company. Morphy was expected to continue as CEO and president until a replacement could be found, following his announced departure in March. On May 13, the company terminated him after he accused Bitfarms of breach of contract, wrongful dismissal, and aggravated and punitive damages.

Future Outlook

Bitfarms sees the developments in Paraguay as indicative of greater growth opportunities in Latin America compared to other regions. The company believes that Paraguay’s unique potential, highlighted by its abundant hydroelectric resources, will support the continued expansion and success of its operations.

As Bitfarms continues to expand its presence in Paraguay and other regions, the company remains committed to leveraging its infrastructure to reduce costs and increase capacity, while navigating regulatory and legal challenges.


Note: Inspirations and information from this article were drawn from crypto-news-flash.com

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