In El Salvador, speculators took advantage of the fact that the Chivo wallet was displaying the price of bitcoin in a non-real time to make money on arbitrage. Therefore, the price freeze function was disabled.
According to message on Chivo’s official Twitter account, wallet users will not be able to see the recommended price for transactions made using the price freeze function. Thanks to this feature, the user can save the bitcoin price for one minute. Chivo said it plans to remove the feature and offer its users a real-time display of the asset’s value.
Some traders in El Salvador have fraudulently earned profits by using the scalping and arbitrage price freeze feature on trading platforms around the world during periods of significant bitcoin price volatility. This feature allowed traders to profit from price differences on Chivo and other cryptocurrency exchanges. They used the Lightning Network to quickly move assets.
Speculators actively used scalping – in 60 seconds they compared the bitcoin rate with its price on cryptocurrency exchanges to find out if the value of assets fell. Although HF scalping is a legitimate form of trading, Chivo has decided that traders who have used the Chivo wallet’s price freeze feature to arbitrage trading on exchanges are scammers with potentially “endless profits”.
Note that the introduction of bitcoin as a means of payment in El Salvador is not going very smoothly. After the launch of the Chivo state wallet, complaints from El Salvadorian citizens began to arrive that fraudsters were using their personal data to set up a cryptocurrency wallet in order to get $ 30 in bitcoins from the state.
Recently, El Salvador’s President Nayyib Bukele announced that citizens are actively using the Chivo wallet to buy bitcoin. In addition, the State of Lightning report says that usage of the Lightning Network has increased since El Salvador adopted bitcoin as a means of payment in September this year.