El Salvador President Allegedly Freezes Assets of Local News Outlet due to Bitcoin Support
May 10, 2026
Salvadoran media entity El Faro recently revealed that assets connected to two of its shareholders have been seized, including bank holdings and real estate properties. According to the outlet, President Nayib Bukele directed this seizure in response to its investigative reporting on corruption within his administration. This action by Bukele is filled with irony, considering his public support for Bitcoin and its principles. Freezing bank accounts contradicts the fundamental cypherpunk philosophy that underlies Bitcoin, a technology that Bukele has championed. If El Faro had used cryptocurrency instead of traditional banking services, such an asset freeze would have been much more challenging to enforce.
Director Carlos Dada of El Faro publicly announced the asset seizures after El Faro discovered them through its financial institution and property records, without any official notification from authorities. Dada characterized these measures as politically motivated rather than financially justified, accusing the government of attempting to stifle dissenting voices. El Faro has an extensive history of reporting on alleged corruption within Bukele’s inner circle, including recent investigations into gang negotiations and a PBS Frontline documentary that aired shortly before the asset seizures. The government had previously accused El Faro of evading around $200,000 in taxes since 2020, a claim the outlet vehemently denies. While Bukele’s team did not provide an immediate comment when contacted by the Associated Press, the president has previously denounced El Faro’s reporting as “fake news.” El Faro had relocated its operations to Costa Rica before the asset seizures and now operates from exile.
Bukele publicly unveiled his Bitcoin strategy at the Bitcoin 2021 conference in Miami, which led to the passage of the Bitcoin Law by the Legislative Assembly, making Bitcoin legal tender in El Salvador. The government introduced the Chivo wallet and distributed approximately $30 worth of bitcoin to every citizen who registered. Subsequently, the administration started purchasing bitcoin, acquiring 400 bitcoins valued at around $20.9 million on the day before the law’s implementation. The government amassed at least 2,300 bitcoins, costing nearly $150 million, although the current status of El Salvador’s bitcoin holdings is uncertain. Bitcoin ATMs appeared, predominantly in commercial areas and in the town of El Zonte, known as Bitcoin Beach. The Bitcoin Law required all businesses to accept bitcoin as payment, with plans for a geothermal-powered Bitcoin City and the issuing of $1 billion in volcano bonds to fund city construction and additional bitcoin purchases. El Faro’s reporting has consistently scrutinized these developments, highlighting the lack of transparency in government bitcoin acquisitions, questions surrounding the $150 million trust fund, and discrepancies between official promises and actual outcomes. The outlet has raised concerns about how the mandatory bitcoin acceptance conflicts with Salvadorans’ preferences and whether these initiatives genuinely benefit citizens or primarily enhance Bukele’s international image.
The Chivo wallet sparked controversy within El Salvador and the Bitcoin community. Although touted as an easy entry point to bitcoin, it functioned as a custodial service overseen by a government entity. Users were required to provide national identification numbers, birthdates, and selfies for Know Your Customer (KYC) and Anti-Money Laundering (AML) verifications, granting authorities access to transaction details that standalone bitcoin wallets avoid. The wallet’s code was obfuscated and closed-source, preventing independent audits. A survey in September 2021 revealed that 68% of Salvadorans opposed the bitcoin adoption, with nine out of ten expressing a lack of understanding of bitcoin. By 2022, only about 20% of businesses accepted bitcoin, and remittances sent through the network remained below 2%.
El Salvador recently revisited some key aspects of its Bitcoin strategy to secure a $1.4 billion IMF Extended Fund Facility loan. The Legislative Assembly amended the Bitcoin Law in January 2025, eliminating the compulsory acceptance of bitcoin by businesses, prohibiting its use for tax payments or government obligations, and reducing direct involvement in the Chivo wallet. These amendments came into effect 90 days later, following the IMF’s concerns regarding the policy’s volatility and risks related to money laundering. Bitcoin enthusiasts and cypherpunks hold diverse views on Bukele’s stance. While some commend the first national endorsement of Bitcoin and the attention it has brought to self-custody tools and Lightning Network payments, others express concerns about the potential erosion of democratic norms under Bukele’s leadership, which undermines the core premise of individual sovereignty encapsulated by Bitcoin. The Human Rights Foundation’s Alex Gladstein articulated this tension, highlighting Bukele’s rapid dismantling of democracy as incompatible with the principles of Bitcoin.
