El Salvador - Bitfinex lands in El Salvador ahead of securities law
The crypto exchange's presence in El Salvador means that the volcano bond issuance is becoming increasingly likely.
The Salvadoran newspaper El Faro reported on 25 February that Bitfinex Securities El Salvador registered as a formal company in the Central American company. This is happening just ahead of a $1bn volcano bond issuance expected by 20 March.
Giancarlo Devasini, the former Italian plastic surgeon understood to be a key figure at Tether alongside JL van der Velde, is pictured with Samson Mow and several Nuevas Ideas members of congress. The firm now has an office listed at Torre Futura in San Salvador.
Devasini es el administrador suplente y Van der Velde es el administrador propietario de Bitfinex Securities El Salvador. El 18 de febrero de 2022 fundaron la empresa en el país, cuyas oficinas están ubicada en la 87 avenida norte, Torre Futura, local 11-06, en San Salvador.
Torre Futura is located in San Salvador’s World Trade Center. The WTC office building is also home to the Inter-American Development Bank (IDB)’s innovation hub, which reports companies participating in a fintech sandbox. BID Lab, host of this hub, is led by CEO Irene Arias Hofman.
There are a couple of takeaways and things to think about here.
First, Bitfinex’ landing in the country means that the $1bn volcano bond will likely happen, it’s just a matter of when. Bitfinex needs to register in El Salvador’s securities market in order to issue the volcano token on its exchange and offer the product to Bitfinex customers. Investors watching the volcano bond issuance have yet to see term sheets on the bonds, but for those who want to buy, this is a vote of confidence.
Second, Bitfinex is benefitting in some way and it’s not through conventional fees. Paolo Ardoino told reporters back in January that Bitfinex would not charge fees for the volcano bond tokens it sells to investors. That raises the question of what interest Devasini and team have in setting up a company in El Salvador. Where Blockstream’s deployment of Liquid platform AMP (even if for the reason to tinker with their new technology) seems understable, Bitfinex’ purpose is more opaque.
One possibility is that this isn’t really about Bitfinex but rather the large holders (whales) of Bitcoin on Bitfinex. It would be understandable if these whales wanted to fund a country’s Bitcoin experiment using the same exchange where they hold their Bitcoin. Especially if they are trying to move capital out of a high-surveillance jurisdiction to a low-surveillance one. It’s hard to know who these whales are, however, and Bitfinex itself is unlikely to reveal the origins of capital flowing into president Nayib Bukele’s Bitcoin nationstate.