A Guatemalan outlet publishes the revelations that a businessman made to a US court during the trial against the Athena company.
All the complaints registered on social networks by hundreds of Salvadorans who usurped their identity to collect the $30 bonus on the Chivo Wallet platform, created by the government as part of the implementation of the Bitcoin Law, now have an explanation and a calculation of how much that implied in losses of public funds for El Salvador.
The revelations of the American Shaun Overton, owner of the company Roi Developers (also called Accruvia), to a United States court bring to light details that the government of Nayib Bukele has hidden about the multiple failures of the application.
A report published by the Guatemalan media outlet No Ficción, written by the Salvadoran journalist Moisés Alvarado, takes up the statements that Overton has given before the Northern District Court of Texas, in Fort Worth, in which he explains details that led to the fraud of between $12 and $24 million to the coffers of the Salvadoran State.
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According to the report, “at least 400,000 accounts created in the first weeks of Chivo Wallet, the government’s electronic wallet for bitcoin and El Salvador dollars, were fraudulent, since they did not belong to the person with whose identity number they were opened. ”
According to Overton’s testimony in court, collected by the publication, “we estimate that between 10% and 20% of all registered users were fraudulent. And the vast majority of that money came from the Chivo Wallet ecosystem.”
The American, whose company was contracted by the Salvadoran government to repair the failures of the platform between September and October 2021, explained that when the number of users of the application was withdrawn from the project, it exceeded 4 million, for which he estimates that the theft through fraudulent accounts ranged between $12 million or $24 million, says the Guatemalan newspaper.
Overton, who sued US company Athena Bitcoin for alleged breach of contract because it owed him $83,698.91 for services related to the Chivo Wallet, told the court that “there was literally no oversight. Anyone on the platform could sign up and get $30.”
What was the fault? The businessman’s explanation is that the error was generated “when the Know Your Client system provider was blocked after the first 150 users were registered in the wallet. Those responsible for Chivo did not take down the system to fix the bug. They decided the wallet needed to stay online for new users to sign up, so they opted to remove the Know Your Customer process entirely,” the post reads.
The KYC failure was precisely what the Colombian businessman Arley Lozano, responsible for the development of the Chivo Wallet application, pointed out as the main cause of the chain of errors that the platform showed and that basically refers to the verification of the identity of the person who registered to receive the $30 bonus offered by the government, according to a recent interview with the digital media Revista Factum.
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This process is the one that, according to specialists, prevents the crimes of money laundering and financing of terrorism, since it allows validating the identity of the person who carries out the financial transactions.
According to the publication, Overton explained at trial that his work on the software occurred at two different times: one contracted directly by the government of El Salvador, which lasted two weeks in mid-September 2021; and the other, by Athena Bitcoin, from September to November of that year.
Non-Fiction claims that Overton was contacted on his personal phone to learn more about his testimony before the Texas Court, but the businessman told them that he “was not authorized to speak to the media.”