Bitcoiners: The New Owners of El Zonte

On Feb. 11, 2024, Paolo Ardoino posted a photo of a table overlooking the ocean, with the phrase “a new home.” He later clarified that he was referring to El Salvador. Five months later, Ardoino bought two plots of land totaling 1,569.93 square meters in Condominio Villanueva Golf Country Club, a residential development known as El Encanto, in the district of San José Villanueva, just off the road leading to the Port of La Libertad.

Ardoino was chief technology officer of Bitfinex Securities, the company that controls Tether. In December 2021, Ardoino gave an interview to El Faro to discuss the plan to commercialize bitcoin bonds, which the Salvadoran government planned to offer to finance the construction of Bitcoin City. Three years later, the bonds never went to market and Bitcoin City was not built. But Ardoino, who became CEO of Tether in December 2023, has remained involved with the Bukele administration .

On July 31, 2024, Ardoino bought the El Encanto real estate with Claudia Lagorio, Tether's chief operating officer. Both Ardoino and Lagorio are naturalized Salvadorans and have DUI cards, according to the public deed of sale.

The Salvadoran government launched a program to give Salvadoran citizenship to those who invested $1 million in Bitcoin, but as of August last year, the General Directorate of Migration (DGME) said it had not issued any, according to Diario El Mundo .

The price of the properties in El Encanto was $1.7 million. They were also paid to a Citibank N.A. bank account in New York, this time in the name of AV Securities Inc.

The seller was Juan Carlos Zighelboim. As in the case of the Devasini property in Santa Elena, Zighelboim got a good deal on the sale. Zighelboim, a U.S. citizen, paid a total of $340,856.76 for the two plots in two sales, the first on Dec. 27, 2013, and the second on Oct. 2, 2015.

Nine years later, he sold them for approximately five times the original value.

In addition to the domicile of his company’s top executives, Giancarlo Devasini has registered 15 companies in El Salvador. 11 of these 15 companies are listed at the same address: Office 6, floor 11, World Trade Center, San Salvador. The law firm Dentons Muñoz operates at that address. And ten of them were registered in the Registry of Commerce between February and June 2024.

A Factum investigation revealed operations of some of these companies (Inversiones Odomin, GCH Hospitality, and GSV Hospitality) in the purchase of real estate in the Historic Center of San Salvador .

What is Tether's business? Tether is a “stablecoin”. That means that, unlike Bitcoin, whose price fluctuates daily, each Tether has a fixed value of one dollar because the company claims to have one dollar for each Tether in circulation.

“Tethers are the poker chips in the cryptocurrency casino,” explains Easy Money, a 2023 book by Harry Abrams. “Imagine you are a buyer or bettor on one of the crypto exchanges and you want to exchange one cryptocurrency for another. Instead of withdrawing money into some physical currency (dollars, euros, yuan), people who want to keep their money in the crypto system but not expose themselves to market volatility choose stable currencies like Tether,” explain authors Ben Mckenzie and Jacob Silverman.

Tether's safety depends on its reserves. Its critics point to the lack of a full audit of the company, and its operations have been questioned by various authorities. In October 2024, the Wall Street Journal reported that the Manhattan U.S. attorney's office and U.S. Treasury Department are investigating the company for possible violations of money laundering rules and transactions with U.S.-sanctioned actors. In response, Tether said in a statement that it is not aware of any investigation and is cooperating extensively with authorities to take down bad actors who abuse tether and other cryptocurrencies.

It’s not the first investigation of the company. For example, Bitfinex and Tether are not licensed to operate in New York State. “Bitfinex and Tether misled customers and the market by overstating reserves, concealing approximately $850 million in losses worldwide,” according to the New York Attorney General’s Office . In December, a regulatory law went into effect restricting the exchange of Tether in the European Union.

This report was produced with the support of the Virtual Assets Grant from the Association of Journalists of El Salvador (APES).