State-run El Salvador Bank Accepts Collateral for USD 1.5 Million Loan with 200 Bitcoin ATMs – Report

State-owned bank in El Salvador apparently gave a crypto business over USD 1.5 million in loans — using 200 bitcoin ATMs as collateral – according to local media reports.

News of the development was first brought to light by a storey by El Salvador.com in El Diario de Hoy, which claimed to have obtained documentation indicating that the Banco Hipotecario de El Salvado (El Salvador’s Mortgage Bank) had approved the loan, which valued each machine at $7,760 USD The guarantee on the loan is good for 36 months.

In the report, which included photos of the documents, Athena Holdings El Salvador was identified as the company in question. “Only seven months prior to the Legislative Assembly passing a bill making bitcoin legal tender in the country,” the paper noted, Athena Holdings was founded in early November of 2020.

Carlos Miguel Rivas Carrillo, the largest shareholder, and Jorge Alejandro Rivas Bernal, the minority shareholder, were both Salvadorans when the company was founded (26). According to the report, the two co-founded the company in November 2020 “with a capital stock of USD 2,000.”

In the terms of the loan, the business headed by Eric Gravengaard, who has previously installed dozens of BTC ATMs in El Salvador, was added as “a secured creditor or co-signer,” according to the article.

Both President Nayib Bukele’s rule and his Bitcoin adoption policies are opposed by this media source, which claims Athena Bitcoin has a “external legal standing not registered in El Salvador.” Athena Bitcoin’s ability to operate as a creditor in a loan deal may be compromised as a result of this.

A new company appears to have taken over the function of Athena Bitcoin in providing technical support for the government’s Chivo bitcoin app and wallet. It was reported last week that the Salvadoran government had given AlphaPoint the responsibility of reviving its Chivo app following widespread accusations of faults and identity theft.

Last year, Athena Bitcoin announced plans to construct 1,500 BTC ATMs in El Salvador. However, recent reports indicate that Athena Bitcoin is no longer the driving force behind the Chivo app.

The Identity and Sustainability Manager of Banco Hipotecario, Julio César Herrera, was quoted by the same media site as claiming that “providing any data” about its “customers” was “not feasible.”

Herrera noted that the bank always acts “in accordance with the regulations and processes set for credit giving” and that it rigorously examines risks when choosing whether or not to accept a loan.

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However, a number of banking professionals were cited by El Diario de Hoy in relation to this issue. In their opinion, this loan was a “poor deal,” and the state-run bank should not have accepted the ATMs as collateral because “Assets depreciate swiftly,” the experts reportedly told the newspaper.

Bitcoin’s price rise prompted Bukele to trolling sceptic Peter Schiff on Twitter, much to the amusement of bitcoiners active on social media.

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