Bitcoin reaches all-time high and El Salvador commits to less regulation

The cryptocurrency breached $69,000 on Tuesday and then fell 8%. In the country, anti-money laundering protocols have just been withdrawn for transactions below $25,000.

By Moises Alvarado/AFP
March 06, 2024- 06:00

Bitcoin broke its record on Tuesday and crossed $69,000 after a new investment formula linked to the price of the cryptocurrency was approved in the US market.

As of Tuesday afternoon, Bitcoin was trading at $69,191.94, surpassing the previous record of $68,991 set in November 2021. However, its value fell sharply in the late afternoon, falling 8% from the top at almost $7,000.

Bitcoin’s record came on a day when gold also reached its all-time high due to prospects of a rate cut by the Federal Reserve (Fed) and doubts about the economy in the United States, which helped the metal gain. ,

“The leading cryptocurrency has seen impressive growth in recent weeks,” said Tickmill analyst James Harte. “The question now is whether the rebound has the strength to sustain itself,” he said.

El Salvador Bitcoin has crossed $60,000 and is getting closer to its record; Bukele confirms “he will not sell”

The new form of investment theoretically allows the broader public to bet on these cryptocurrencies without directly owning them. This new formula was approved by the US market regulator, Securities and Exchange Commission (SEC) on January 10.


The cryptocurrency has increased in value by more than 50% since the beginning of the year, after falling to around $15,000 by the end of 2022.

This decline comes after the bankruptcy of several giants of the sector such as FTX, the second largest cryptocurrency exchange platform.

Its manager at the time, Sam Bankman-Fried, was accused of using client accounts without his knowledge to promote the speculative operations of his investment company along with other politicians.

Regulators, still struggling to effectively regulate cryptocurrencies, regularly warn against the mirage of staggering profits that could encourage buyers to invest too much and lose too much, Or may become a victim of fraudulent schemes.

“Buying after a price increase is rarely a good idea,” said Laith Khalaf of AJ Bell. “Past episodes have shown that those who enter at the height of the frenzy stand to lose heavily,” the analyst warns.

The record comes as Australian computer scientist Craig Wright, who claims to be the inventor of these cryptocurrencies, is on trial in London until mid-March following a complaint accusing him of being a fraud. .

Wright, 53, claims he is Satoshi Nakamoto, the pseudonym of the creator of Bitcoin, a decentralized digital currency developed in 2008.

Bitcoin, Opacity Relationship in El Salvador

The adoption of Bitcoin in El Salvador was a complete failure because, except in a few genuine cases, the Salvadoran population does not use it for their everyday transactions, as the government intended. This is despite investments of over $200 million (including the diversion of CABEI loans) which were used to develop the state wallet, the Chivo wallet, a network of ATMs managed by Athena, and the formation of an opaque trust in the hands of Bandcel .

Everything surrounding Bitcoin in El Salvador seems like a mirage, which is also made clear by some cryptocurrency enthusiasts, such as German Jeff Gallas, founder of the company Fulmo, who was part of a documentary by state television Deutsche Welle. . Of that European country.

In it the businessman participated in an informative talk given by the Ministry of Foreign Affairs about El Salvador’s plans regarding cryptocurrencies.

In the video, Gallas assures that this is the same information he provided them a year ago without any changes, and in which specific data such as time frames and investments have been omitted.

The latest big news is the abolition of a key anti-money laundering protocol: the application of the process called Know Your Client (KYC) or Know Your Client in Spanish.

It obliges financial institutions to collect information related to their customers, so that the origin of the funds transferred can be identified. Also, being able to detect if a person or company is performing unusual operations that do not fit their profile.

Last week, the Legislative Assembly approved reforms to the tax code to request Unique Identification Documents (DUI) of customers only for financial transactions, including cryptocurrencies, for amounts of $25,000 or more. In practice this means that local crypto companies will not be able to verify their customer’s identity for small amounts. Previously, this limit was set at $200.

This reform was made at the request of the Office for National Bitcoin (ONBTC), led by Max Keizer and Stacey Herbert. According to what Stacey Herbert, a member of that organization, told the CryptoNoticias website, the law will be amended to protect the privacy of customers. Therefore, the possibility of extending it to other articles and provisions of the Tax Code remains open.

Nayib Bukele with Bitcoin promoter Max Keizer, who deleted dozens of tweets defaming Ukraine, in addition to an appearance on a Russian propaganda outlet. photo courtesy

Not imposing these controls on companies could be risky for a country, and this has been expressed by the government of El Salvador itself. For example, in September 2023, the Vice President of the Republic Félix Ulloa assured that, because El Salvador was attracting companies related to cryptocurrencies, it was possible that “cyber criminals” could settle here who could commit all kinds of crimes. Were. , such as fraud or theft.

“What is needed? Create an entire legal infrastructure to deal with these types of crimes that occur in all parts of the world,” Ulloa said. This seems to be similar to what was proposed by the Bitcoin Office and the Assembly for Privacy. Already approved by, he goes in the opposite direction.

You just have to remember what happens when KYC protocols are not in place: When Chivo Wallet was just launched, in September 2021, the system that implemented it collapsed, preventing customers from continuing to register. Went. The solution to the problem of those responsible was to completely withdraw the KYC protocol.

The result was that between 400,000 and 800,000 fake accounts were created, each of which was subsidized by $30. In other words, simply by preventing KYC enforcement, the Salvadoran state was robbed of between $12 million and $24 million. Who benefits from deregulation?

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