ELSALVADOR and International Monetary Fund (IMF) plays He-Said/She-Said over if the country continues to buy BTC Tokens for its digital asset “Treasury.”
On May 27, IMF issued a statement Details of the global lender that reaches a “staff level agreement on the first review under El Salvador’s extended fund facility arrangement.” The event includes a loan of US $ 120 million like IMF makes the central American country to increase its Wonky economy, part of A larger agreement of $ 1.4 billion The parties agreed earlier this year.
The statement contains the following text:
“At Bitcoin, efforts will continue to ensure that the total amount of Bitcoin held over all state -owned wallets remains unchanged, in accordance with program commitments, while being of the public sector’s participation at the end of the public wallet.”
And yet, the same day, the official X account for El Salvadors National Bitcoin Office (Onbtc) Tweetad“El Salvador just bought more bitcoin.” The tweet indicated that El Salvador’s BTC tax chamber had grown by eight tokens over the past seven days, which increased its total holdings to 6,190.18 tokens worth almost $ 673 million.
So who says the truth here? This is not at all the first time the two parties’ stories about the country’s BTC position have diverged since they agreed that $ 1.4 billion Bailout, which came up with certain conditions.
The IMF said the deal would deal with “risks that arise from the Bitcoin project, including … by limiting the public involvement in Bitcoin-related activities and transactions in and purchasing Bitcoins.”
But just a week after it is up, El Salvador’s President Nayib Bukele Tweetad That the country “did not stop” its BTC buys. Bukele added that the purchase “will not end now, and it will not end in the future.”
Theories abound When it comes to what the game El Salvador is playing here. It is proposed that the government simply moves the BTC that it already owns from non-public Wallets to public to maintain the illusion of new BTC purchases and thus burn Bukele’s “rebel” image.
The fact that the IMF does not turn off Bukele’s financial lifeline indicates that these theories may have some qualifications. That in/out gambit would definitely follow the IMF’s edict to ensure that “the total amount of bitcoin held over all state -owned wallets remains unchanged.”
Others have noted that onbtc is a specialized administrative unit with a degree of autonomyThat can give any legal turning room as to whether or not purchases make the government. But there are also questions about the government actually owns some BTC claims to hold in its wallet (which we come to a second).
El Salvador’s bitcoin dream turned into nightmare
Bukele’s enthusiastic assumption of everything BTC extends far beyond the government that launches a BTC tax chamber. 2021 El Salvador adopted a law Designs BTC as a legal tender and required dealers Accept it as payment for goods and services.
Then came the Chivo Digital Wallet launch, which offered BTC $ 30 to all BTCs to anyone who registered and downloaded Chivo. The government also encouraged Salvadorans who live abroad to submit BTC-based transfers via Chivo.
Chivo rollout turned out to be a complete failure, with many individuals trying to register to discover that insufficient checks meant that someone had already claimed $ 30 by their name. Dealers thought that the BTC wallet infrastructure was not ready for Prime Time, which only left those in the foreign-dominated “bitcoin beach” zone that still accepts BTC payments.
BTC-based transfers accounted for just $ 28.8 million During the first four months of 2024, almost 1% of the total $ 2.64 billion passed over this. Worse is that BTC Dollar total was lower than the $ 32 million sent home via Chivo during the first four months of 2023 and even lower than 2022’s $ 39.4 million (while the total transfer total increased each year).
In October 2024, a San Salvador University investigation found that 92% of 1,224 respondents did not use BTC to make transactions. It was a worse result than a similar study from 2023 where 88% said they did not use BTC. Only 1.3% of Salvadorans thought that Bitcoin should be El Salvador’s “main” for a prosperous economic future.
The same month reported a reason why the magazine Magazine spent a week in El Salvador, during which he could not persuade a single dealer To treat a BTC-based transaction.
There are many reasons why BTC failed to gain momentum in El Salvador, including motivated concerns about uncertain infrastructure. The fees associated with BTC transactions – currently standing About $ 1.50 After meeting $ 3.65 earlier this month-is simply too high for small value transactions, no matter where they occur.
Who is watching BTC Watchmen?
The IMF’s statement in February revealed that Bukle (under Press) made “Acceptance of Bitcoin of the private sector volunteer and ensured that tax payments are made only in US dollars.” El Salvador further promised to “gradually unwind his participation” in Chivo and ensure that digital asset control/supervision “improved in line with developing international best practice.”
As mentioned earlier, the government also agreed to “limit the government’s involvement in bitcoin-related economic activities, as well as state transactions in and purchases of bitcoin.” Bukle may be struggling for the parameters of the word “limitation”, but defiantly throwing the scarce public money on speculative investments while they require international rescues probably not what the IMF had in mind.
El Salvador’s government has reportedly assured the IMF that its BTC purchases “do not violate the terms of their agreement. This may be because the government does not actually buy any BTC, according to An eye -opening report by El Salvador journalist earlier this year.
Alvarado noted that almost all 6,114 BTC symbols in government possession from March 2025 appear to have come from digital wallets associated with the controversial Bitfinex Digital Asset Exchange. In addition, there is no proof that El Salvador pays Bitfinex for these transfers or controls these symbols.
Alvarado detailed how 80% of BTC in the digital wallet identified by Bukele as the government’s “cold wallet” came directly from Bitfinex-controlled wallets. The other 20% – with the exception of three BTC coming through Binance Exchange -Originated from Bitfinex wallets but took a cycle through the Chivo wallet before it was transferred to the cold wallet.
Alvarado noted the lack of any public information about the origin of the state funds allegedly used to acquire these symbols. A similar lack of public documentation confirms that tokens in this cold wallet belongs to the state. In other words, BTC can still belong to Bitfinex.
Bitfinex, tether no strangers to data debacle
Bitfinex is guided by the same individuals behind Tetherthe issuer of USDT, the world’s leading Stablecoin with market cases. The two companies have deeply embedded themselves in El Salvador during Bukele’s time as president, helps shaping the country’s digital asset laws and regulationsWhich leads to both companies being given licenses during the new regime.
Bitfinex and Tether share DNA in the form of Paolo Ardoino, which is CTO for the former and CEO of the latter. Both companies were founded by Giancarlo Devasini, which together with Ardoino has been Valued by Bukele at El Salvador’s Presidential Palace.
While Bitfinex is registered in the British Virgin Islands, it has made El Salvador the head office for a number of its subsidiaries. In January, Tether Moved the company’s head office to El Salvador. Both Ardoino and Devasini have bought home with several million dollars in the country, while Ardoino has gone better and taken Salvadoran citizenship.
Tether has also expressed plans to build a kind of office tower in central San Salvador and claims to have active block reward operations in El Salvador (more on this below). Overall, Bitfinex/Tether has made a fairly large investment in El Salvador and thus has a strong incentive to stay on Bukele’s good side.
To be clear, there is no concrete evidence of any illegal quid pro quo between these parties but both Bitfinex and Tether has previously been caught and presented a set of books for the world while hiding the real figures out of sight.
Tether is also not a stranger to questions over Fiat Reserve that supports its $ 153 billion in the issued USDT. For a decade, Tether has promised that A review is on the way But never delivered one, which led to many conclusions that Tether knows something that it would prefer that the public did not know.
When it comes to Bukle …
Volcanic mining: hot or not?
Alvarado published Another report Earlier this month, there were holes in El Salvador’s claims to be a bitcoin mining power plant.
Mining is a powerful activity, so access to cheap electricity can mean the difference between profit and loss for Block reward miners. Bukle has long proclaimed its country’s large deliveries of geothermal energy, which is plentiful, cheap and much more environmentally friendly than electricity generated through burning fossil fuels.
In May 2024 onBTC issued a triumphant statement that 473.5 BTC had been broken out with El Salvador’s geothermal energy Since September 2021. But Alvarado dug into these claims and discovered that there is less here than meets the eye.
Alvarado claims that the information in the mining tab on the OnBTC website “does not compile Bitcoin mine activity in El Salvador but rather consolidates information from various mining pools around the world.”
Alvarado compared the website tasks with reference to operations from the US Foundry Pool with data from the US Foundry regarding its global operations. Alvarado thought the information was “completely consistent, including the time and the amount of Bitcoin obtained as a reward.”
Alvarado quoted an unidentified “Crypto Asset Expert” that says the OnBTC website shows “no headline saying it is mining activity in El Salvador, but the government has not disproved this confusion. It seems like a kind of propaganda operation.”
ONBTC is run by Stacy Herbert, wife of BTC Maximalist Max Keizer, who advises Bukle in crypto issues. Keizer is too President of volcanic energyA company that was launched in June 2023 to mine Bitcoin via El Salvador’s geothermal energy. The government would receive 23% of the company’s revenue.
Then, tether announced It would “provide capital and bring its domain competence in energy, hardware and communication to build volcanic energy.” The following April, Volcano Energy claimed it Mining would start in January. But so far, these operations have not yet begun. Volcano Energy’s website have not published any news updates Since October 2023.
In November last year, Bukele was once again speaking the enormous opportunities for volcanic mining, suggesting that the operators could “Rent” one of his country’s 170 volcanoes. Media reports Dutific, the previous claims from the country repeated 473.5 bitcoin.
So are Bukle, Bitfinex and Tether simply mythmaking here? Perhaps there is no major irony that the people who celebrate the term “do not trust, verify” seem unable to verify their fiscal claims. If you can’t tolerate the heat, get out of the volcano.
Look: Teranode is the digital spine in bitcoin
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