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The provenance of the Bitcoin that President Nayib Bukele moved to a cold wallet is under question in light of recent disclosures in a report by Moises Alvarado, as reported by local Salvadoran media. Due to its purported connection to the global cryptocurrency exchange Bitfinex, the transfer of 5,690 BTC to El Salvador’s treasury—dubbed the “piggy bank” wallet—is currently being investigated.
According to Alvarado’s study, addresses connected to Bitfinex may be used to track down 80% of the Bitcoin that was sent into El Salvador’s treasury. With the strong connections between the Salvadoran government and the previously stated exchange, this begs the question of who really owns these bitcoin holdings.
The report reveals that the 4,569 BTC deposited in El Salvador’s cold wallet arrived in five separate transactions over March 13 and 14. Moreover, an additional 1,121 BTC originated from the hot wallet within the Chivo Wallet ecosystem, further complicating the ownership narrative.
Alvarado issues a warning, speculating that this transfer would have unfavorable outcomes that might defund Chivo Wallet and unintentionally harm residents who had bitcoin stored in the wallet. The lack of clarity on the source and ownership of the BTC that was exchanged raises concerns.
El Salvadorian economist Rafael Lemus highlights the difficulty in confirming the ownership of the transferred Bitcoin, echoing Alvarado’s worries. Lemus draws attention to the uncertainty surrounding whether the 5,000 bitcoins actually belong to the Salvadoran government, especially in light of the sizeable percentage that came via Bitfinex.
President Bukele is unwavering in his dedication to Bitcoin investments in the light of these disclosures. Recently, he declared that El Salvador would keep buying one Bitcoin every day until fiat currencies could no longer be supported.
The openness and accountability behind El Salvador’s Bitcoin investments come under more scrutiny as the investigation gets more intense and as doubts remain. The paper emphasizes how complicated and dangerous it may be to combine national treasuries with erratic bitcoin markets.