El Salvador gets its bitcoin from Bitfinex, raising control concerns

After tracing the bitcoin listed on El Salvador’s sovereign balance sheet, some researchers wonder if Bitfinex – rather than Nayib Bukele’s administration – controls these coins. According to a newspaper report today from Fabricio Altamirano’s El Diario de Hoy, reblogged on sister website ElSalvador.com, nearly 100% of El Salvador’s bitcoin reserves originate from Bitfinex.

The contentious print and web investigation cites a researcher, Mario Gómez, who further speculates that Bitfinex is aiding Bukele in faking ownership of bitcoin that is in fact donated, loaned, or otherwise controlled by Bitfinex.

Protos has been unable to independently verify these extraordinary claims.

Who controls El Salvador’s 6,114 bitcoin?

Bukele’s administration hosts an official website claiming that the government owns 6,114.18 bitcoin. That figure matches third-party estimates at Nayib Tracker.

These disclosure portals are limited in what they reveal, showing the balance in a specific address. Whether the coins are in the wallets is far less interesting than where they come from, whether they are encumbered, and who possesses their private keys.

Digging into the history of the coins that landed in that wallet, researchers claim that 80% of these bitcoin originated from Bitfinex-controlled wallets – and that the remaining 20% were transferred through Chivo Wallet yet ultimately derived from Bitfinex-controlled wallets. There was additionally a de minimis amount that seemed to come from Binance.

El Salvador’s close ties with Bitfinex, and Tether

As Protos previously reported, it is common knowledge that Bukele’s administration has numerous business and financial ties with Bitfinex and its sister stablecoin, Tether.

The government has used Bitfinex for its now-terminated bitcoin dollar cost averaging purchases, as well as for the lion’s share of the original purchases. Tether and Bitfinex entities have also received digital asset service provider licenses in El Salvador and have facilitated offerings like Bitcoin bonds, Volcano Energy financing, crypto derivatives, and tokenized securities.

Tether even moved its headquarters to El Salvador. Executives Paolo Ardoino, Claudia Lagorio, and Giancarlo Devasini have bought real estate in the country.

Today’s reporting suggests a larger than previously known number of El Salvador’s bitcoins came from Bitfinex. The International Monetary Fund (IMF) agreement recently signed by the Bukele administration may reveal any problems with the Salvadoran bitcoin.

Read more: IMF approves El Salvador’s $1.4B loan but imposes bitcoin restrictions

As part of a $1.4 billion deal with the IMF, Bukele has promised to provide extensive details about his bitcoin purchases. He has also revoked its status as legal currency and committed to curtailing further purchases. For now, investigative journalists can only speculate as to the encumbrances and funding sources for El Salvador’s 6,114.18 state bitcoin.