Chivo Architect Says It’s Time to Shut Down El Salvador Bitcoin Wallet

One of the architects of El Salvador’s state-run Chivo crypto wallet has claimed the government should shut the app down.

In an interview with the Spanish-language media outlet Criptonoticias, Arley Lozano (aka Vakano) said:

“The most sensible thing to do would be to shut down the Chivo Wallet due to the controversy it has generated since its launch.”

Chivo Regrets?

Lozano is the Co-Founder of the Panda Exchange and also directed the team that created the Chivo Wallet for the El Salvador government.

🇸🇻 El Salvador keeps betting on Bitcoin, pledging to expand its holdings despite IMF warnings about crypto risks.#Bitcoin #ElSalvador https://t.co/FXIO11iYL0

— Cryptonews.com (@cryptonews) December 20, 2024

Chivo was the world’s first government-run Bitcoin (BTC) wallet, and launched to much acclaim in September 2021.

In a bid to drive up adoption, the state gave Salvadoran users a “golden hello” of $30 in BTC when they opened a Chivo wallet.

However, this led to widespread accusations of identity theft, fraud, and reports of Chivo-related bugs that saw accounts frozen.

Many people claimed that they only downloaded the app to receive the $30 handout, which they immediately traded for fiat.

The app’s user base declined sharply after an initial rush, and it has been beset with controversy ever since.

Lozano suggested that “saying goodbye” to the Bitcoin wallet would be a logical “part of El Salvador’s evolution.”

“Many users have experienced problems with their accounts. And others have taken advantage of the Bitcoin wallet to commit fraud. I believe that it is for this reason that the International Monetary Fund asked El Salvador to distance itself from the app.”

Arley Lozano

El Salvador reached a deal with the International Monetary Fund after four years of negotiations that were strained by the country’s adoption of Bitcoin as a legal tender https://t.co/fsWvAxtybp

— Bloomberg (@business) December 18, 2024

Government to Make Privatization Decision

Lozano was speaking in the wake of the Salvadoran government’s decision to privatize or discontinue the Chivo Wallet.

The government says that “service” would not be interrupted during the process if Chivo was sold off. But Lozano said this decision would be a “mistake.”

“It [would be] a mistake because, ultimately, we all have access to technologies superior to the Chivo Wallet, especially as we head into 2025. There are tools out there that have already been tested and work efficiently.”

Lozano

The expert added that the state’s decision would only “benefit the competition – companies that offer Bitcoin wallet services and that can now attract Salvadoran users.”

He explained that he worked on the project with experts from the US-based firm Athena Bitcoin. However, Lozano opined that the team was ill-equipped to deal with Chivo.

Lozano said that the problems with Chivo had already become apparent by December 2021. He suggested that this was the point when the government should have said:

“Let’s put an end to the Chivo Wallet and start again from scratch, with another team in charge.”