Carlos Fernandes A report by the Organized Crime and Corruption Reporting Project (OCCRP) accuses El Salvador’s President, Nayib Bukele, of misappropriating significant amounts of funds from a loan meant for economic aid. These funds were ostensibly redirected to support the initiative of adopting bitcoin as legal currency in the country.
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OCCRP Report: Misallocation of Funds by Nayib Bukele
In a detailed report released on October 31, the OCCRP asserts that President Nayib Bukele of El Salvador misused funds designated for facilitating Bitcoin-related initiatives within the country. The investigative report reveals that financial assistance from the Central American Bank for Economic Integration (CABEI), initially intended to bolster the country’s economy amidst the Covid-19 crisis and assist small and medium-sized enterprises (SMEs), was diverted. Of the $600 million loaned, a meager $20 million was reportedly expended on the intended economic relief measures.
Government budget records, purportedly scrutinized by OCCRP investigators, indicate a reallocation of $425 million to cover unspecified “general state obligations.”
Link to Bitcoin Legalization
The OCCRP’s investigation delves deeper, uncovering that from the reallocated $425 million, a staggering sum exceeding $200 million was allegedly allocated to the campaign for bitcoin legalization in El Salvador.
CABEI had previously declared its endorsement of El Salvador’s Bitcoin venture. Dante Mossi, the president of CABEI, had in June 2021 expressed the bank’s commitment to supporting El Salvador’s pioneering decision to adopt bitcoin as legal tender.
Mossi had remarked:
We are witnessing a monumental event for the region. Our institution takes pride in being the initial point of contact for the Salvadoran Government’s groundbreaking proposal, marking a historic moment as the country becomes the first to endorse bitcoin as an official currency.
However, the conditions of the $600 million loan explicitly barred the utilization of these funds for Bitcoin-related endeavors. Prior assessments had indicated that El Salvador would require comprehensive legal and regulatory changes necessitating significant investment.
Clarifying the bank’s stance, Mossi noted:
There is a specific stipulation within El Salvador’s agreement that bars the use of CABEI funds for any Bitcoin-related undertakings. We strictly adhere to this policy.
Additionally, the initiative to integrate bitcoin as legal tender in El Salvador has encountered criticism from various quarters. Notably, Cristosal, a civil society organization, lodged three lawsuits in November 2022 against the Salvadoran administration. These legal challenges pertain to the government’s management of funds used for bitcoin acquisitions, the establishment of the Chivo Bitcoin ATM network, and purported identity theft affecting over 200 individuals through the same network.
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Frequently Asked Questions (FAQs) about Bukele Bitcoin embezzlement
What does the OCCRP report allege against President Nayib Bukele?
The report by the Organized Crime and Corruption Reporting Project alleges that President Nayib Bukele of El Salvador has misappropriated funds. Specifically, it claims that he redirected $200 million from a $600 million loan, which was provided by the Central American Bank for Economic Integration to support economic recovery during the Covid-19 pandemic, towards projects related to the implementation of Bitcoin as legal tender in the country.
What was the intended purpose of the CABEI loan to El Salvador?
The loan from the Central American Bank for Economic Integration was intended to bolster the Salvadoran economy during the Covid-19 pandemic, with a particular focus on aiding small and medium-sized enterprises (SMEs). Of the total $600 million provided, only $20 million was used for its designated purpose according to the OCCRP investigation.
What does the CABEI say about the use of its loan for Bitcoin projects?
CABEI’s president, Dante Mossi, affirmed that the terms of the loan explicitly prohibited the use of any funds for Bitcoin-related activities. He stated that an agreement was in place ensuring that CABEI funds could not be allocated to support any initiatives involving Bitcoin.
Has there been any legal action taken in relation to the Bitcoin project in El Salvador?
Yes, Cristosal, a nonprofit organization, has filed three legal actions against the Salvadoran government. These actions are related to the alleged mismanagement of funds for purchasing Bitcoin, the construction of the Chivo Bitcoin ATM network, and reported identity theft associated with the use of the Chivo network.
More about Bukele Bitcoin embezzlement
- Organized Crime and Corruption Reporting Project (OCCRP)
- Central American Bank for Economic Integration (CABEI)
- El Salvador Bitcoin Law
- Cristosal
5 comments
not surprised, Crypto always gets the bad rap because of how people misuse it, the idea was good but if this is true, it’s really disappointing
This is why we cant trust politicans, always using money for their own agendas What happened to helping the people during the pandemic?
wow i can’t believe Bukele would do something like this Didn’t El Salvador just start with Bitcoin as legal tender? where is all the money going?
if these allegations are true, then it’s a huge set back for crypto’s rep worldwide, was really rooting for El Salvador’s bitcoin move… smh
Gotta take these reports with a grain of salt till we get all the facts, Media can twist things up sometimes, waiting for more info before judging