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This week is special because September 7, 2022 is the first anniversary of El Salvador formally accepting Bitcoin as legal tender – the first country in the world to do so. The day before the law went into effect, the price of Bitcoin was over $50,000. However, on Friday it cost $20,634.97
El Salvador’s Bitcoin Experiment
The South American country’s Legislative Assembly passed the Bitcoin Law on June 8, 2021. Since September, President Nayib Bukele has been tweeting about his latest cryptocurrency purchases for the country, even as Bitcoin prices peaked and later crashed. The IMF warned El Salvador that the move came with financial risks that could affect consumers.
According to website Nayib Tracker, El Salvador had approximately 2,381 BTC as of Friday, and its investment is down 54.07%.
Residents of El Salvador have also raised complaints about the state-run virtual wallet Chivo, which they use for Bitcoin transactions. These were allegations of identity theft and missing funds. The government of El Salvador changed wallet technology providers in February 2022.
The country has also rejected claims that its investments are loss-making. El Salvador’s Finance Minister Alejandro Zelaya previously pointed out that no bitcoins were sold at current market prices and that investments in bitcoins in El Salvador amounted to less than 0.5% of his budget. Plans to issue a Bitcoin bond are also on hold for now.
Despite market conditions, El Salvador saw a dramatic increase in tourism the year it adopted Bitcoin.
Safe return from Ronin
Blockchain analytics platform Chainalysis revealed on September 8 that its Crypto Incident Response Team helped seize more than $30 million worth of cryptocurrency stolen by hackers linked to North Korea.
This comes six months after the hack of the Ronin network in March 2022, in which approximately $600 million worth of cryptocurrency was stolen. It continues to be one of the biggest known crypto hacks in history. The stolen crypto-assets were transferred through Tornado Cash – a mixer that obscures the origin of both legitimate and stolen crypto-funds and makes it difficult to trace illegal actors.
However, the US Treasury Department’s Office of Foreign Assets Control (OFAC) authorized Tornado Cash in August. The hacker group Lazarus then surprisingly used decentralized finance (DeFi) services to launder their stolen cryptocurrency. This allowed law enforcement and crypto organizations to trace some of the stolen assets.
North Korean hacking groups like Lazarus are believed to be resorting to cryptographic hacks to avoid economic and financial sanctions.
Direct speech for Celsius
DeFi platform Celsius’s unpredictable decision in June to freeze user withdrawals and transfers sent shockwaves through the crypto industry. More than 1.7 million customers are waiting to learn the fate of their savings as Celsius filed for Chapter 11 bankruptcy in the US.
On Sept. 7, a filing from the United States Bankruptcy Court for the Southern District of New York by the Vermont Department of Financial Regulation criticized Celsius in the strongest possible terms.
The state regulator alleged that Celsius and its CEO Alex Mashinsky “made false and misleading claims to investors” about the platform’s health and legal compliance.
While Mr. Mashinsky tweeted on May 11, 2022 that Celsius had not suffered any “significant losses,” the company’s preliminary financial records showed that between May 2 and May 12, it had unrealized losses of approximately $454,074,042.
Celsius customers are now waiting to hear whether the appointed examiner will formally investigate the company’s activities.
