According to several reports, the Salvadoran government-issued bitcoin wallet, Chivo, has been freezing wallets and requesting that owners verify the source of funds. The founder of El Zonte’s Bitcoin Beach stated that the government’s bitcoin wallet software is flagging and freezing wallets that receive transactions from Wasabi, a non-custodial bitcoin wallet that utilizes Coinjoin technology to obscure onchain transaction monitoring.
Bitcoin Beach Founder Says Salvadoran Government Is ‘Bowing to U.S. Pressure to Thwart Privacy’
Bitcoin (BTC) is now legal tender in El Salvador, and the government offers infrastructure services such as bitcoin automated teller machines (ATMs) and a mobile bitcoin wallet called Chivo. The Chivo wallet has faced criticism in the past, and the International Monetary Fund (IMF) has raised concerns about the wallet’s regulatory oversight. Recently, the founder of El Zonte’s Bitcoin Beach and other community members reported that Chivo wallets were being flagged and frozen.
“This week a local carpenter we know had his wallet frozen for $1000 transactions,” the Bitcoin Beach Twitter account stated on April 3. “They asked him to prove the origin of funds. The friction will push people back to the traditional banking system. Their bank transactions receive less scrutiny than [bitcoin] transactions. Small normal legitimate transactions that they the need to spend hours trying to justify.” In another tweet, Bitcoin Beach reported that the Chivo software is flagging and freezing wallets that receive transactions from Wasabi, and apparently, they are “bowing to U.S. pressure to thwart privacy.”
Furthermore, the founder of Bitcoin Beach, Mike Peterson, addressed the issue during a live broadcast. “We as bitcoiners need to keep putting pressure on Chivo, on the government, on these people because they are getting pressure from this other direction,” Peterson stated. According to reports, Chivo wallet users who have their funds flagged and frozen must provide documentation on the origin of the money. However, not everyone subscribes to the theory that Chivo is blocking Coinjoin transactions originating from Wasabi.
“I have sent post mix coins to Chivo addresses without any problems,” explained the Twitter account Escape to El Salvador. “I’m not saying the person Mike paid didn’t get their account frozen, but there simply is no proof that it was because of that. Believe it or not, there are…
Click Here to Read the Full Original Article at Bitcoin News…
