Multiple reports indicate that Chivo, a bitcoin wallet issued by the Salvadoran government, has frozen the wallet and is requiring owners to verify their source of funds.El Zonte’s Bitcoin Beach founder said the government’s bitcoin wallet software is flagging and freezing wallets that receive transactions from Wasabi, a non-protected bitcoin wallet that uses Coinjoin technology to obscure on-chain transaction monitoring.
Bitcoin Beach founder says Salvadoran government is “bowing to US pressure to interfere with privacy”
Bitcoin (BTC) has become legal tender in El Salvador, and the government provides 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 The International Monetary Fund (IMF) has expressed concerns about regulatory oversight of the wallet. Recently, the founder of El Zonte’s Bitcoin Beach and other community membershave reportedthat Chivo wallets have been flagged and frozen.
“This week a local carpenter we know had his wallet frozen for a $1000 transaction.” Bitcoin Beach’s Twitter accountsaid on April 3.” They asked him to prove the source of the funds. This friction will push people back into the traditional banking system. Their banking transactions are less monitored than [bitcoin] transactions. It’s a small, normal, legitimate transaction, and you have to spend hours justifying it.” In anothertweet, Bitcoin Beach reported that the Chivo software is flagging and freezing wallets that receive transactions from Wasabi, apparently “bowing to US pressure to interfere with privacy.”
Additionally, Bitcoin Beach founder Mike Petersonaddressed the issueduring a live broadcast.” We as Bitcoiners need to keep the pressure on Chivo, on the government, on these people, because they are being pressured from this other direction,” Peterson said. According to reports, Chivo wallet users whose funds have been flagged and frozen must provide documentation regarding the source of the funds. However, not everyone agrees with the theory that Chivo is blocking Coinjoin transactions originating from Wasabi.
“I sent post-mixed coins to Chivo’s address without any problems,” explained the Twitter account Escape to El Salvador.” I’m not saying that the person Mike paid didn’t have their account frozen, but there is simply no evidence that this was the cause. Believe it or not, there are a lot of people on the Internet who say things without verifying them,” the person added.Wasabi is a bitcoin wallet that uses a technology called Coinjoin to allow users to mix their unused transaction output (UTXO) with others It is designed to allow users to mix unused transaction output (UTXO) with others. Additionally, blockchain analysis firms like Chainalysis claim that Wasabi’s mixed transaction scheme can