State-run El Salvador Bank Accepts 200 Bitcoin ATMs as Collateral for USD 1.5M Loan – Report
A state-owned bank in El Salvador has reportedly handed out a crypto firm a loan of over USD 1.5m – accepting 200 bitcoin (BTC) ATMs as collateral.
The development was reported by El Diario de Hoy’s ElSalvador.com, which wrote that it had obtained access to documents proving that the Banco Hipotecario de El Salvador (Mortgage Bank of El Salvador) had signed off on the loan, which valued each machine at USD 7,760. The loan’s warranty period is 36 months.
The report included photographs of the documents, and named the firm in question as Athena Holdings El Salvador. The report continued by noting that Athena Holdings was established in early November 2020, “just seven months before the Legislative Assembly” passed a law making bitcoin legal tender in the country.
It noted that the partners at the time of the company’s founding were Salvadorans, namely 33-year-old Carlos Miguel Rivas Carrillo, the majority shareholder, and Jorge Alejandro Rivas Bernal (26). The duo founded the company “with a capital stock of USD 2,000” in November 2020, the report noted.
The terms of the loan, per the report, indicate that Athena Bitcoin, the company headed by Eric Gravengaard that has already rolled out scores of BTC ATMs in El Salvador, was added as “a secured creditor or co-signer” on the loan deal.
The media outlet – which is opposed to both the rule of President Nayib Bukele and his BTC adoption policies – remarked that Athena Bitcoin has “foreign legal status not registered in El Salvador.” It hinted that this could thus compromise Athena Bitcoin’s ability to function as a creditor in a loan agreement.
Athena Bitcoin had been providing tech support to the government’s Chivo bitcoin app and wallet – but it appears this role has now been handed over to another firm. Last week, Cryptonews.com reported that the Salvadoran government had announced it had tasked AlphaPoint with rebooting its Chivo app, following widespread reports of errors and identity fraud.
Athena Bitcoin last year announced it was set to install 1,500 BTC ATMs in El Salvador, but last week appeared to indicate that it was no longer the driving force behind the Chivo app.
We support Chivo S.A., in their efforts to maximize user benefits and security for all of @chivowallet Cheers to @AlphaPointLive and progress in V2.0! We remain in SV, honored to optimize #Chivo, service our clients, support our peers in the BTC community and El Salvador.— Athena Bitcoin (@AthenaBitcoin) February 3, 2022
The same media outlet quoted the Banco Hipotecario’s Identity and Sustainability Manager, Julio César Herrera, as explaining that it was “not feasible” to “provide any data” on its “clients,”
César Herrera remarked that the bank always acts “in accordance with the policies and procedures implemented for the granting of credit,” and that it assesses risks stringently when deciding whether to approve or deny a loan.
But El Diario de Hoy also quoted a number of banking experts on the matter. These experts reportedly told the newspaper that as “ATMs are assets that depreciate rapidly,” they considered the loan to be a “bad deal,” and added that the state-run bank should not have accepted them as collateral.
Meanwhile, with BTC prices on the up again, Bukele decided that the time was right to troll the arch-crypto skeptic Peter Schiff on Twitter, much to the mirth of social media-based bitcoiners.
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