Reports of Fraud Mar El Salvador’s Bitcoin Journey

In a week that saw bitcoin rocket to near previous highs, El Salvador’s own grand experiment with embracing the crypto as legal tender seems to be getting some pushback.

At this writing, bitcoin is trading at more than $61,000, well within highs of roughly $64,000. But the mechanics of getting bitcoin more firmly entrenched into El Salvador’s daily life is proving to be a challenge. Security issues have arisen, according to reports.

La Prensa Grafica reported that identity theft through the Chivo wallet has been on the rise. Those who claim to have been victimized have said their Unique Identity Document (DUI) had been used to withdraw the $30 in bitcoin that is tied to the wallet downloads. Those alleged victims said they had not downloaded the applications or received any of the bitcoin – but the IDs had been used to download the apps and withdraw the $30 in bitcoin.

Elsewhere, in an examination of how people are spending their bitcoin, the same site noted that many individuals have been withdrawing their bitcoin tokens, embracing dollars to buy what they need. In other examples, social media sites like Facebook are dotted with offers to buy the $30 worth of bitcoin for $25 in cash, via bank transfer or payments on electronic platforms.

In the meantime, there is evidence that government efforts will embrace bitcoin in paying for public works and various projects. In one example, José María Chicas, from the New Ideas party and mayor of Ilopango, has said that the municipal council agreed to purchase a bitcoin. The profits will reportedly be used to finance municipal projects.

And in another example, President Nayib Bukele said the country will invest some of the $4 million in gains stemming from its own bitcoin holdings to build a veterinary hospital. The government will reportedly fund the project by drawing dollars from its bitcoin trust account.

According to La Prensa Grafica, Banco Hipotecario has aligned with four blockchain-focused companies to promote the use of bitcoin. The firms partnering with the bank include TESOBE (described as the company behind the Open Bank Project); API3, which is focused on smart contracts; Qredo, an asset management company; and Sovryn, a trading and lending platform.