El Salvador: Condemns Unauthorized Use of Funds to Implement Bitcoin

Cristosal asked the Accounting Court that the Attorney General’s Office should be certified if “there is any unlawful act” in order to “start the appropriate criminal proceedings”.

The Criminal group filed a complaint this Friday (October 9, 2021) with the Accounting Court of the Republic of El Salvador (CCR), alleging that it may have improperly handled state funds that implement bitcoin as legal tender.

El Salvador became the first country in the world to accept bitcoin as a payment currency alongside the US dollar on September 7. To facilitate the use of the cryptocurrency in the exchange of goods and services, the ChivoWallet government wallet was launched and a network of ATMs managed by a private company built with public funds was installed, the complaint said.

According to Cristosal, when the Electricity Transmission Company of El Salvador (ETESAL), a subsidiary of the Lempa River Autonomous Hydropower Executive Committee (CEL), created a company called Chivo, there was a “legal fraud to evade inspection”.​ The mechanism “helps to evade control and oversight of the execution of public funds,” the complaint said. According to a press investigation, a similar mechanism was used to create the government agency Diario El Salvador.

Another alleged breach by Crossal was the “opaque source of funds used to build the booth,” which placed Chivo ATMs and provided guidance on the use of cryptocurrency. Documents submitted to the CCR indicate that these were established before the legislative decree that created a $150 million trust fund for the launch of the project.

In a brief submitted by Cristosal, special inspections were requested to determine whether the cottage was built with state funds and to verify the bidding process. Another point that Cristosal is asking for investigation is the same use of funds allocated to the said trusts before they became effective.

The humanitarian group asked the CCR to certify to the Attorney General’s Office (FGR) if there was “any unlawful act” in order to “start the appropriate criminal proceedings”.

Leave a Reply

Your email address will not be published. Required fields are marked *