An Overview of the Investigation
An investigation conducted by the Organized Crime and Corruption Reporting Project (OCCRP) has revealed that Nayib Bukele, the President of El Salvador, misused hundreds of millions of dollars provided by the Central American Bank for Economic Integration (CABEI) for the development of the Bitcoin legal tender project.
The OCCRP's report, published on October 31, exposes how the government diverted funds, originally intended to alleviate the country's economic struggles during the COVID-19 pandemic, to finance Bitcoin-related initiatives.
The Misuse of Funds
CABEI granted a loan of $600 million to El Salvador in 2021, aiming to support small and medium enterprises (SMEs) and address the economic challenges caused by the pandemic. However, according to the investigation, only $20 million of the loan was utilized for its intended purpose.
Instead, budget documents examined by OCCRP associates indicate that $425 million was allocated to fulfill general state obligations. Disturbingly, it was discovered that more than $200 million of these funds were used to facilitate the adoption of Bitcoin as legal tender in El Salvador.
Although CABEI publicly expressed support for the Bitcoin project, it was stated in the loan agreement that these resources should not be used for Bitcoin-related activities. Previous assessments had concluded that extensive legal and regulatory reforms would be necessary, requiring significant funding.
Dante Mossi, the president of CABEI, emphasized that no money from the institution should have been allocated to fund Bitcoin activities. However, the investigation found that a substantial portion of the funds directed towards general state obligations was, in fact, used for this purpose.
Legal Actions and Controversy
The process of "bitcoinization" in El Salvador has attracted criticism, with nonprofit organization Cristosal filing three legal actions against the government. These actions relate to the management of funds used by Bukele to purchase Bitcoin, the construction of the Chivo national network of Bitcoin ATMs, and allegations of identity theft involving over 200 citizens using the Chivo network.
The OCCRP's investigation has shed light on the alleged misuse of funds by President Nayib Bukele of El Salvador. As the legal actions proceed and public scrutiny intensifies, the future of the Bitcoin project in the country remains uncertain.
What are your thoughts on the OCCRP report? Share your opinions in the comments section below.
Frequently Asked Questions
Can I physically possess gold in my IRA account?
Many ask themselves whether they can physically possess gold in an IRA account. It is a valid question, as there is no legal way to possess gold in an IRA account.
However, if you examine the law carefully, you will see that there are no restrictions on gold ownership in an IRA.
The problem is that most people aren't aware of how much money they could be saving by putting their precious gold in an IRA.
It is easy to toss gold coins, but it's not easy to place them in an IRA. If you decide that you want to keep your gold at home, you'll be responsible for two tax payments. Once for the IRS and once for the state where you live.
You can also lose your gold and have to pay twice the taxes. So why would anyone want to keep their gold in their home?
It might seem that you want the security of knowing your gold is safe inside your home. However, to guard yourself against theft, it is worth considering storing your gold in a more secure location.
You shouldn't even leave your gold in your home unless you plan to visit often. If you leave your precious gold unattended thieves will easily steal it.
It is better to keep your gold in an insured vault. Your gold will be safe from fire, flood and earthquake as well as robbery.
Another advantage to storing your gold in a vault is that you won't have to worry about paying property tax. You will have to pay income taxes on any gains from the sale of your gold.
An IRA is a way to avoid paying taxes on gold. You don't pay income tax on the interest you earn with an IRA.
Capital gains tax doesn't apply to gold. That means you have the right to cash your investment at whatever time you choose.
And because IRAs fall under federal regulation, you won’t have any problems getting your gold transferred to another institution if you move.
The bottom line is that you can own gold in your IRA. Your fear of it being stolen is what holds you back.
Can I add gold to my IRA?
The answer is yes! You can add gold to your retirement plan. Because gold doesn't lose its value over time, it is an excellent investment. It is also resistant to inflation. It also protects against inflation.
Before you decide to invest in gold, it is important to understand that it isn't like other investments. You cannot purchase shares of gold companies like bonds and stocks. Nor can you sell them.
Instead, you must convert your gold to cash. You will have to get rid. You can't just hold onto it.
This makes gold an investment that is different from other investments. With other investments, you can always sell them later. That's not true with gold.
Worse, the gold cannot be used as collateral for loans. If you get a mortgage, for example, you might have to give up some of the gold you own in order to pay off the loan.
What does all this mean? You can't just keep your gold forever. You'll eventually need to convert it into cash.
You don't need to worry. You only need to open an IRA account. Then, you are able to invest in gold.
How much money can a gold IRA earn?
Yes, it is possible. But not as many as you might think. It all depends on how risky you are willing to take. If you can afford to invest $10,000 every year for 20-years, you could possibly have $1,000,000 by retirement age. However, if you have all your eggs in one place, you could lose everything.
Diversifying your investments is important. Inflation can make gold perform well. It is important to invest in assets that increase with inflation. Stocks perform this well because they rise whenever companies increase their profits. Bonds are also able to do this. They pay interest each year. So they're great during times of economic growth.
What happens when inflation is absent? During deflationary periods, bonds fall in value while stocks fall further. Investors should not put all of their savings in one investment such as a stock mutual fund or bond.
Instead, they should diversify their investments by investing in different types of funds. They could invest in stocks or bonds. They could invest in both cash as well as bonds.
By doing so, they are exposed to both the positive and negative sides of the coin. They can see both the inflation and the deflation sides of the coin. And they will still see a return over time.
Statistics
- To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met: Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. (stratatrust.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (monex.com)
- Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
External Links
en.wikipedia.org
takemetothesite.com
wsj.com
kitco.com
How To
How to determine if a Gold IRA works for you
Individual Retirement accounts (IRAs) are the most common type of retirement account. Individual Retirement Accounts (IRAs) are available through financial planners, banks, mutual funds and employers. Individuals are allowed to contribute up to $5,000 each year to IRAs without having to pay tax consequences. This amount can go into any IRA. However, certain IRAs have limits on the amount you can deposit. For example, you cannot contribute to a Roth IRA unless you're at least 59 1/2 years old. You must wait until your age 70 1/2 to make contributions if you are under 50. Some people may also be eligible for matching contributions if they work for their employer.
There are two types primarily of IRAs. A traditional IRA lets you invest in stocks, bonds, real estate, and other investments, while a Roth IRA lets you invest only in after-tax dollars. Roth IRA contributions can be made without tax, but they will still be subject to taxes if you withdraw from it. Some people may choose to use both. Each type of IRA comes with its own pros and cons. What should you look at before deciding which type is best for you? Below are three important things to keep your mind on:
Traditional IRA Pros
- Companies have different options when it comes to contribution options
- Employer match possible
- Save more than $5,000 per Person
- Tax-deferred tax growth until withdrawal
- You may have income restrictions
- Maximum annual contribution is $5,500 ($6,500 for married couples filing jointly).
- The minimum investment is 1000
- After age 70 1/2, you must begin taking mandatory distributions
- You must be at the least five years of age to open an IRA
- Transfer assets between IRAs cannot be done
Roth IRA pros:
- Contributions do not attract taxes
- Earnings can grow tax-free
- There are no minimum distribution requirements
- Stocks, bonds, and mutual fund investments are the only options.
- There is no maximum contribution limit
- There are no restrictions for transferring assets between IRAs
- Open an IRA if you are 55 years or older
If you are thinking about opening an IRA, it is important to be aware that not all companies offer exactly the same IRAs. For instance, some companies offer a choice between a traditional or a Roth IRA. Some will let you combine them. It is also important to note that different types IRAs will have different requirements. Roth IRAs have no minimum investment requirements, while traditional IRAs require a minimum $1,000 investment.
The bottom line
When you are choosing an IRA, it is crucial to consider whether you will pay taxes now or in the future. If you are retiring within ten year, a traditional IRA could be the right option. A Roth IRA may be a better choice for you. In either case, it's a smart idea to speak with a professional about your retirement plans. It's important to have someone who is knowledgeable about the market and can suggest the best options for you.
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