Monday, October 3

Bitcoin disappeared from El Salvador’s Chivo wallet, citizens complain

A Salvadoran found that at least 50 citizens of El Salvador lost a sum equivalent to BRL 550 thousand, in dollars and bitcoin, in the Chivo app, the country’s official wallet. Many of them even complain about the technical support offered by the government.

El Salvador’s adoption of Bitcoin has already received criticism from all sides. Both the International Monetary Fund (IMF) and Vitalik Buterin, founder of Ethereum, have already been opposed to the Bitcoin Law.

However, the biggest problem seems to be the portfolio offered by the government. Centralized, closed-source and without offering custody of funds to its citizens, Chivo is also being the target of complaints for carrying out unauthorized transactions.

Adoption of Bitcoin in El Salvador

El Salvador adopted Bitcoin as its country’s legal currency on September 7, 2021. Despite the good attitude in offering an option to use a currency with controlled printing, the government still faces some criticism regarding this implementation.

One of the biggest alerts is the Chivo wallet which, contrary to what is recommended, does not allow its users to have full control over their money. In other words, it is a centralized wallet in which the government can freeze funds, going against Bitcoin principles.

Despite this, it is worth noting that people are not obliged to use it, although they received around 150 reais in BTC to install it, helping to popularize Chivo in relation to other portfolios.

Citizens complain about Chivo wallet

Although it’s not clear what the reason is, lack of education or Chivo’s own fault, many users are complaining that their balances are disappearing from the wallet. A user, called The commissioner, found 50 cases of this type, the sum of which is close to R$ 550,000.

“After documenting 50 cases of fraud on the chivo wallet, the value is $96,223.83. Only in these cases.”

The claims involve both bitcoin and dollar amounts as it is a hybrid wallet, again highlighting doubts about the government’s ability to manage such liabilities.

The easiest path would be to use ready-made, open-source services that, unlike Chivo, can be audited by third parties. Furthermore, as citizens do not have absolute control over their money, the government may even be working with fractional bitcoin reserves, something that if confirmed would be bad for the country’s action.

Finally, even with the adoption of Bitcoin, citizens are again dependent on the State, which, due to lack of knowledge, do not migrate to other services with better practices.

When Chivo was implemented, the population’s personal data were leaked, which is yet another problem to be managed.