Paraguay uses artificial intelligence to detect Bitcoin mining farms

As part of the Paraguayan government’s crusade against illegal Bitcoin mining, authorities in that country began using artificial intelligence (AI) to detect clandestine farms.

As reported by the National Electricity Administration (ANDE), on December 21 In May, a joint intervention was carried out against a mining farm in Bitcoin apparently illegally connected to the electrical grid.

ANDE highlights that, for this intervention, they used technological tools, including AI, which was used to detect «important electrical variations«. According to the agency, this allowed technicians to identify and verify such fluctuations, which they relate to illegal Bitcoin mining.

Electrical variations, however, are not necessarily a consequence of Bitcoin mining activity. There are other reasons why electricity can fluctuate, such as a precarious electrical infrastructure. Something that happens in Paraguay, a country that cannot use half the energy it producesas stated by engineer José Encina, technical advisor of the Yacyretá Binational Entity (EBY).

In its statement, the electricity regulator details that the farm was located in a warehouse located in the city of Saltos de Guairá, in the department of Canindeyú. In the operation Officials from ANDE, the Public Ministry and members of the National Police participated. from Paraguay.

In detail, the farm was made up of 176 ASIC miners and two 1,000 kVA electrical transformers each. According to ANDE, the mining equipment was seized and transferred to the Prosecutor’s Office headquarters in Saltos de Guairá. The transformers, meanwhile, were left in the same place “sealed” and “as evidence for the investigation into the crime of theft of electrical energy.”

Paraguay’s electricity authorities maintain that this illegal farm generated property damage of approximately USD 900,000 per year. This money, added to the intervention costs and the application of the corresponding fines, “must be paid by the person responsible for the property.”

ANDE defends its actions by remembering that they are “fighting, head-on, and at a national level, clandestine connections and improper use of electrical energy,” since they “cause significant economic damage,” as well as affecting the functioning of the electrical system, according to what they expose.

What does the Paraguayan State do with the seized miners?

Based on the more than 50 ANDE interventions carried out since the beginning of 2024, The Paraguayan State has seized more than 6,000 Bitcoin miners. This is a significant number of machines with which a large mining farm can be established, contributing a high hash rate to the Bitcoin network.

But what does the Paraguayan State do with the seized miners? According to specialists in the matter, these teams are undergoing a liquidation process. through which it is intended to recover part of the losses generated by illegal mining.

Fernando Arriola, leader of the Blockchain vertical of the Paraguayan Chamber of Fintech, said in a Space with CriptoNoticias last April that regarding the seized miners and any other assets from illegal activities, There are procedures for its liquidation and auction.

He explained that the auction of the seized miners is done at a legal level. Generally, they are presented on a state website, statements are issued through newspapers and media, and finally the interested parties go and acquire the miners.

Now, Arriola doubts that these miners will be able to be sold, because in his opinion, “they are scrap metal.” He argues that illegal operators usually have low-performance and low-power ASIC equipment, since they do not pay for energy, and they get money anyway.

“Their business is to buy cheap miners and since they do not pay for energy, they make those miners fantastically profitable. “If you don’t have energy costs, even an Antiminer S9 will be profitable,” he said.