The Organized Crime and Corruption Reporting Project (OCCRP) has accused El Salvador’s President Nayib Bukele of misappropriating funds earmarked for economic relief to facilitate the adoption of Bitcoin as legal tender. These funds, totaling hundreds of millions of dollars, were sourced from a loan provided by the Central American Bank for Economic Integration (CABEI) intended to support small and medium-sized businesses during the pandemic.
According to the OCCRP’s investigation, only $20 million of the $600 million loan was put towards its original purpose. Instead, it suggests that the Bukele administration redirected $425 million to cover “general state obligations,” with more than $200 million allegedly used to back the nation’s Bitcoin initiatives.
This diversion of funds has raised eyebrows, given CABEI’s clear stipulation against using the loan for Bitcoin-related activities. CABEI’s president, Dante Mossi, had voiced the bank’s enthusiasm for El Salvador’s Bitcoin journey, saying, “We are very proud to be the first to receive the request from the Government of El Salvador in this transformative process that is making history again today, by being the first country to adopt bitcoin as an official currency.” Despite this support, Mossi confirmed, “no money from CABEI could be used to fund any Bitcoin activity.”
This is not the only challenge that El Salvador is facing as it looks to establish itself as a Bitcoin nation, the ‘Singapore of the Americas‘. Cristosal, a human rights organization, has lodged multiple legal complaints against the government. These include issues related to the use of funds for Bitcoin purchases, the construction of a national Bitcoin ATM network, and accusations of identity theft linked to the Chivo network involving over 200 citizens.