• A Chivo wallet programmer opened up about the different issues the El Salvadoran cryptocurrency wallet faced during its early stages.
• These issues included ID theft, money laundering, and technical problems.
• A legal dispute between Accruvia and Athena Bitcoin is currently in progress to address the alleged fraud.
El Salvador’s flagship cryptocurrency wallet, Chivo, has been marred with problems since its inception. The wallet, which was created by the government to introduce the use of bitcoin as legal tender, has had to face various issues such as identity theft, money laundering and tech issues.
Recently, Shaun Overton, a developer that was reportedly part of the Chivo Wallet team, revealed details about the different issues the wallet had to face. Overton alleges he was hired to help in the handling of the issues.
One of the major issues was the lack of proper KYC (know your customer) procedures. This allowed anyone to check in with a Salvadoran IP address and a Salvadoran ID document. However, this led to a series of ID thefts that resulted in a wave of fraud. According to Overton, “We never established the exact amount of fraud, but we estimated that 10 to 20 percent of registered users were fraudulent.”
El Faro, a local news site, estimates the amount that was fraudulently withdrawn to be more than $10 million. This has resulted in a legal dispute between Accruvia, a software developer, and Athena Bitcoin, the company in charge of developing and operating Chivo Wallet. The dispute was introduced by Cristosal in November 2020.
Though the issues have been addressed and the wallet was replaced by Alphapoint in February, Overton’s story sheds light on the importance of proper security measures and regulation in the cryptocurrency world. This is especially important in a place like El Salvador, where the government is trying to introduce the use of bitcoin as legal tender. It is essential that such issues are addressed and resolved before they become a major source of concern.