El Salvador Chivo Wallet Programmer Opens Up About Identity Fraud, Technology and Money Laundering Allegations CryptoGlobe

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A Chivo wallet programmer has opened up about the various issues El Salvador’s flagship cryptocurrency wallet faced during its early stages. Shaun Overton, who claims he was hired to help troubleshoot the issues, spoke about identity theft, money laundering issues and technical issues he observed while working with the Chivo team.

Chivo Wallet Problems Deconstructed

Shaun Overton, a developer who is said to have been part of the Chivo Wallet team, spoke about the various issues that the flagship cryptocurrency wallet, created by the government to popularize the use of bitcoin as legal tender in the country, has faced. faced during its early stages. . The statements offered by Overton are part of a legal dispute between Accruvia, a software developer, and Athena Bitcoin, the company responsible for the development and operation of Chivo Wallet, which was replaced by Alphapoint in February.

According to local news site El Faro, Overton was brought in by Chivo’s team to deal with issues the day after the project was launched, which was “in flames”. One of the first issues was the implementation of KYC (know your customer) procedures, which allowed anyone to register with a Salvadoran IP address and a Salvadoran identity document.

This led to a series of identity thefts which led to fraud as the app offered a $30 bonus for new signups. Overton said:

We never established the exact amount of fraud, but we estimated that 10-20% of registered users were fraudulent.

El Faro estimates the amount that was fraudulently withdrawn at over $10 million, and there is currently an ongoing lawsuit filed by Cristosal in November over the matter.

No more missteps

The system also had more issues that affected its core function and allowed threat actors to take advantage of these flaws. The wallet only updated the bitcoin price once per minute, a bug that allowed people to arbitrate using other price sites to benefit from unreported price changes. Overton said it caused a “money drain” and gave examples of users who started with $2,000 and managed to get $400,000.

He stated:

Since the Chivo Wallet ecosystem did not compensate for market risk, all of the profits for these people came from the government of El Salvador.

Additionally, Overton claimed that the Chivo Wallet team deliberately disabled KYC filters when the system failed, to allow the app to meet its goal of registering 50,000 users and allowing people to transfer money. money in bank accounts without reporting it due to a bug in the app. Overton concluded that the app was “full of fraud”.

What do you think of Shaun Overton’s allegations about the problems Chivo Wallet faced in El Salvador? Tell us in the comments section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late in the game, entering the cryptosphere when the price spike happened in December 2017. Having a background in computer engineering, living in Venezuela and impacted by the cryptocurrency boom at the social, it offers a different point of view. on the success of crypto and how it helps the unbanked and underserved.

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