El Salvador's Gulag Cryptopelago
There's stablecoins and cabinet secretaries involved. Also fascism.
The most recent personage in the seemingly never ending parade of “hey, remember that sketchy person you were paying attention to because of the sketchy crypto things they were doing? Well they’re in the news today because they’re involved in the Trump administration” that makes up my day to day life in 2025 is none other than El Salvador’s Nayib Bukele, the self described “world’s coolest dictator”.
Recently Bukele made the news when the Trump administration decided to go into America’s jails and detention centers, rustle up a few hundred1 currently incarcerated people whom Donald Trump claims are members of a Venezuelan criminal gang named Tren de Aragua (but at least a few of whom seem to not be members of any gang, let alone Tren de Aragua), and ship them off to a new life in El Salvador’s new and truly dystopian CECOT mega prison. This seemed to surprise a lot of people, seeing as how American law says literally nothing about renting out space in violent foreign prisons to house people the American government does not like. It’s a subject on which the silence of American jurisprudence could reasonably be described as “deafening”.
What wasn’t silent, however, was the soundtrack to this expensive looking promo video the Trump administration and/or the Bukele team managed to put up within minutes of the deportees arrival. 21st century fascist aesthetics are wild.
Of course those of us who follow the real news - which is to say the miasma of clickbait, “alternative facts”, demagoguery, and Russian propaganda that makes up most Americans’ information diet these days - were not at all surprised2. The plan to rent out space in a violent Salvadoran mega prison to house the Trump administration’s enemies had been announced publicly by Bukele, Elon Musk, and Trump consigliere Stephen “Pee Wee German” Miller in early February, and there were plenty of reasons to suspect such a move was coming even before the 2024 election.
The subject of why Bukele has built a mega prison and used it to terrorize a truly impressive percentage of the Salvadoran citizenry is a nuanced historical subject I don’t really have time for here but the short version is something like:
In the 80s and early 90s El Salvador experienced an incredibly violent 13 year long civil war. The CIA’s role in that conflict is probably best described as “not helpful”.
Many Salvadorans fled to America to escape that war.
Some of those Salvadorans and/or their children, having limited economic opportunities, got involved in the drug trade, resulting in the rise of a legitimately terrifying gang called MS-13.
During the course of America’s ongoing societal suicide mission that some call “The War On Drugs" a lot of those MS-13 members were deported back to El Salvador, a place many of them had never even been to before3.
So many violent criminals were sent into such a small and unstable country in such a short time span that El Salvador became one of the most dangerous countries in the entire world, leading the murders per capita charts for an impressive stretch.
The voters of El Salvador cried out for a fascist strong man to come in and round up all the young men, human rights be damned. This resulted in an explosion of El Salvador’s prison population and a concomitant extremely dramatic increase in public safety.
Needless to say Nayib Bukele, despite being an unaccountable and deeply corrupt dictator, is wildly popular in his home country. Some polls I’ve seen put him as the single most popular democratically elected leader in the world. It’s a story that perhaps America’s Democratic party could learn a lot from the next time it’s considering setting border policy.
THE CRYPTO OF IT ALL
You may be blissfully unaware that Nayib Bukele, in addition to being a certifiable dictator and trampler of human rights, is also one of the world’s most famous crypto bros. If this collision of what purports to be a libertarian technology project (bitcoin) with outright fascism (Bukele) is surprising to you, you probably have not read David Golumbia’s prescient “The Politics of Bitcoin: Software as Right-Wing Extremism”. Suffice it to say that there’s nothing surprising about this seeming contradiction.
The story starts a few years ago when Bukele declared bitcoin to be legal tender in El Salvador4.
Bukele promptly began using El Salvador’s reservoir of taxpayer money to buy bitcoin on the open market, frequently tweeting about his purchases on The Privatized Public Square5. Appreciative crypto bros set up a website nayibtracker.com where you can track the man’s purchases.
Some of this newly purchased bitcoin was redistributed back to the Salvadoran citizens (the same citizens whose tax dollars had paid for it) for use in day to day transactions via something called Chivo Wallet, an event which caused crypto bros all over the world to literally cream their pants. Here, finally, was The Use Case For Crypto. The long thirteen year wait was over and the global decentralized financial future had arrived to empower the world’s poor and disenfranchised - hallelujah!
Unfortunately, however, no one ever bothered to ask the citizens of El Salvador whether they wanted to use bitcoin and - surprise! - it turned out they don’t give a fuck about bitcoin and don’t want to use it. Chivo Wallet turned out to be a total fiasco just like every other arrival of The Use Case For Crypto before it. Numerous hilarious videos of disappointed crypto bros attempting to buy stuff with bitcoin in El Salvador only to be told the store would only accept demonic “real” money like US dollars were posted to The Social Media Wastes, and there was much rejoicing.
Anyways this state of affairs continued until a few months ago when the International Monetary Fund (IMF) told Bukele to cut that shit out immediately, in response to which Bukele told the IMF they could fuck right off with their globalist bullshit, which is more or less also what Bukele said upon learning that an American court had declared disappearing people into Salvadoran mega prisons without due process to be wildly illegal a few days ago.
THE TETHERER’S APPRENTICE
The Bukele crypto story doesn’t end with Chivo Wallet. Far from it - Chivo Wallet was just the beginning of the man’s crypto journey. Because it turns out the most important company in crypto also has deep ties to El Salvador. That company is named Tether and it also has incredibly deep ties to the Trump administration.
I wrote a lot about Tether here and to understand just how dystopian a company Tether is you should read that post because I won’t be going into the details here. The important part is that Tether, a company “practically quilted out of red flags” (to quote Bloomberg) that facilitates fraud and money laundering on a scale heretofore unimaginable in human history, has6 its money managed by7 a man who recently became America’s Secretary of Commerce: Howard Lutnick, AKA “Wall Street’s top used burning car salesman”. To say Tether is now deeply intertwined with the American government would probably be an understatement.
So what’s Tether got to do with El Salvador? Turns out a whole lot. Start with the fact that Bitfinex, Tether’s sister company8, became integrated into the Salvadoran financial system a few years ago as a marketplace for “tokenized securities”9. This took place after Moody’s (a credit rating agency) downgraded the central bank of El Salvador’s credit score due to the “complex operating environment for banks” under bitcoin fascism.
Then in August 2023 Tether CEO Paolo Ardoino10 announced that Tether was launching a large scale bitcoin mining operation in El Salvador. As proof of that enterprise he posted an obviously photoshopped image of shipping containers with the Tether logo on them, claiming the bitcoin transaction processors (“mining rigs”, in the parlance of the bros) were humming away processing bitcoin transactions (“mining”) inside the containers. Journalists who attempted to visit the site were told to STFU and sent away having never seen a single mining rig.
Just so you can see it for yourself here’s a zoomed in version:
Not long afterwards in June of 2024 Tether registered a company called “Tether Operations Limited” in the country, and shortly after that, on the very eve of the Trump inauguration in January of this year, Tether announced it was relocating its headquarters to El Salvador.
Also in June of 2024 a contingent made up of America’s best and brightest conspiracy theorizing crypto fascists - Donald Trump Jr., Tucker Carlson, former congressman Matt Gaetz (R-Florida), and Senator Mike Lee (R-Utah) - flew to San Salvador to attend Bukele’s victory over his country’s constitutional term limits.
I’m sure all of this is just a coincidence and the fact that Donald Trump is sending people he doesn’t like to die in foreign mega prisons funded in part by some of the dodgiest people in the crypto industry in no way implies that the world is currently sliding into the abyss of fascism facilitated by backroom deals between crypto bros, central American military juntas, and the American government.
MORE IS MORE
There’s a lot more I could say about Bukele’s corruption - things like his plan to build a geothermally powered bitcoin shaped city on the side of a volcano, the failed “volcano bond” issuance that attempted to raise money for that bitcoin shaped city, various conflagrations and call outs from the International Monetary Fund, the fact that the United States Congress established an official El Salvador Caucus shortly after Bukele hired Tether’s lobbyist, etc. - but instead I will just direct you a thread I compiled with some information about Tether and Bitfinex’s goings on about San Salvador.
There’s many potentially shady things in that thread but from where I’m sitting the most interesting and/or suspicious thing thing I was able to dig up is the fact that the central bank of El Salvador just so happened to sell of all of its commercial paper holdings at the same time as Tether was liquidating tens of billions of dollars worth of the now infamous commercial paper that had lain at the core of their entire stablecoin operation. The majority of that commercial paper, which Tether had represented to be just as good as U.S. dollars for years, turned out to have been issued by the five largest state run banks in the People’s Republic of China.
If you’re still thirsty after that or interested in Bukele’s corruption outside of the crypto realm I can offer a link to El Faro, a Salvadoran newspaper that publishes a lot of English language content. The fact that El Faro, along with a lot of its reporters, was driven into exile in Costa Rica after reporting critically on “the world’s coolest dictator” should give you some sense of what you will find.
[UPDATE] Found a photograph that didn’t make the initial publication date that sums up a lot of what is going on in bitcoin fascism.
Maybe. We don’t actually know how many people yet because there was no due process and the Trump administration has declared the information top secret because of “national security”.
Just like we were not at all surprised when a bunch of Silicon Valley billionaires threw in for Trump in an attempt to get out from under various criminal and civil charges.
The original “dreamers”, I guess.
Along with the US dollar, which is confusingly also the official currency of El Salvador.
An app called “X”, FKA “Twitter”.
Technical “had”, past tense, because Howard Lutnick is no longer the CEO of Cantor Fitzgerald. Now Cantor Fitzgerald is run by… two of Howard Lutnick’s twenty something year old sons (lol).
Tether is also reportedly partially owned by Lutnick though details are sketchy. In his congressional confirmation hearing Lutnick would only admit that his firm Cantor Fitzgerald “has a convertible bond” with Tether.
Tether is a stablecoin; Bitfinex is a cryptocurrency money laundering service exchange where you can buy and sell crypto.
So far most of the capital raises for things like hotels that were launched through Bitfinex Securities turned out to be duds, but they’re not tired of trying yet.
A man who avoided setting foot in the United States for many years, commonly assumed to be because he feared arrest, but was recently spotted posting selfies from Washington D.C.
" but the important part is that Tether, a company “practically quilted out of red flags” (to quote Bloomberg) "
Damn, that is just epic!
Ah, yes, the “understanding.” I learned 30 years ago this summer that among fratbros, “we have an understanding” about payment almost always involved dodgy to blatantly illegal shuffling of funds, almost always connected to impressive expenditures on cocaine and/or underage strippers that needed to be hidden from the authorities. To this day, if I hear any iteration of “understanding” among the MBA set, I secure my wallet with both hands, a nail gun, and at least two kilos of Bondo.