Bitfinex donates over $1.3 billion worth of crypto to Salvadorean small businesses

The trading platform linked to Tether is making sizable donations to small businesses in El Salvador as it aims to strengthen its position in the country. Risky move.

Bitfinex, the crypto exchange owned by the same entity that owns Tether, announced it would allocate 36 BTC and 600,000 USDT (worth over $1.3 billion in total) to support small businesses in El Salvador, the first country in the world to recognize Bitcoin as legal tender. The funds are to be distributed among businesses in areas that reported street gangs extorting money from businesses, Bitfinex said in a statement.

The decision to allocate funds was made in appreciation of El Salvador’s efforts to promote Bitcoin, the company added, even as targeted businesses are not necessarily Bitcoin adopters. Among others, the program would include initiatives involving pollution reduction in lake Ilopango and cleaning up litter in Apopa.

Taking a stance against gang violence in El Salvador might strengthen Bitfinex’s relationship with President Naiyb Bukele, but the international community could be less enthusiastic. El Salvador’s state of emergency, which Bukele extended for the third time in late June, was denounced by human rights agencies as an excuse to resort to human rights violations. In the space of two months, more than 35,000 people have found themselves behind bars, with no access to legal counsel or even a phone.

But iFinex, the parent company of both Bitfinex and Tether, is walking that fine line for a reason. It's providing the financial technology for El Salvador’s forthcoming Volcano token, even as it seeks to promote its stablecoins in developed countries. It's also advising the Salvadorean government on cryptocurrency legislation and regulation.

Bitfinex hasn’t explained who would be eligible for aid or responsible for allocating the funds. It’s unclear how many companies will receive support. If each recipient were to be given the lowest Salvadorean average salary (approximately $400 per month), the money would be enough for more than 3,000 companies.