Investigation Reveals El Salvador Misused One-Third of $600 Million COVID Relief for Bitcoin
An investigation has exposed how El Salvador’s government misallocated a large portion of a COVID-19 relief loan to fund its controversial Bitcoin project.
The COVID-19 pandemic plunged El Salvador into economic turmoil in 2020, causing GDP to plummet nearly 8% and leaving many struggling to survive the strict lockdown measures. So when the Central American Bank for Economic Integration (BCIE) approved a $600 million loan in 2021 to provide relief for small businesses ravaged by the crisis, it offered a lifeline for millions of Salvadorans.
An investigation by the Organized Crime and Corruption Reporting Project (OCCRP) uncovered that only a fraction of the funds ever made it to those in need, however.
Rather than providing the aid as intended, the government of President Nayib Bukele diverted over $200 million to bankroll his pet project: making El Salvador the first country to adopt bitcoin as legal tender.
The controversial cryptocurrency scheme has already drawn rebukes from international financial institutions like the IMF and World Bank. But Bukele plowed ahead anyway, allocating the diverted pandemic aid to build the infrastructure for Bitcoin’s rollout across El Salvador. This move defied the loan agreement‘s specific prohibition on using the money for cryptocurrency. BCIE president Dante Mossi conceded the fungibility of money, while also admitting bitcoin makes up less than 1% of El Salvador’s economy.
When the $600 million loan from the Central American Bank for Economic Integration (BCIE) was approved in April 2021, BCIE president Dante Mossi said it would benefit 4 million people through small business assistance. According to OCCRP’s investigation, however, by the time the funds arrived in July 2021, only $20
Read more on cryptonews.com
