El Salvador Hires AlphaPoint to Fix Bitcoin Digital Wallet Bugs
El Salvador’s Bitcoin wallet, Chivo, is taking steps to improve security and eliminate transaction issues that had initially angered users and caused gripes to pile up against the application.
Local wathcdog groups have collected thousands of complaints against the company ranging from stolen identities to failed transactions that never credited money back to their accounts. In other cases, transactions would take hours to go through, leaving customers and merchants wondering if a payment had been approved.
To address the issue, the government-run Chivo S.A. de CV hired New York-based AlphaPoint to run the technology that powers the wallet and fix the bugs in its original iteration.
Founded in 2013, AlphaPoint has worked with 150 customers, from startups to state-owned banks, in over 35 countries, according to CEO Igor Telyatnikov. Clients include CME Group (NASDAQ: CME ), the Royal Mint, Scotiabank and the Royal Bank of Canada, it says. Telyatnikov said the company began working with Chivo in mid-December. His plan is to bring the company’s experience working in regulated jurisdictions and building high-frequency trading systems to El Salvador.
“Users just have smoother experiences, there are less issues with transactions and any transaction that has issues, there are tools by which to research, remediate and follow up,” he said in an interview. “The percentage of transactions that has any sort of issue has sharply decreased in orders of magnitude.”
Chivo launched on Sept. 7 when Bitcoin became legal tender in El Salvador alongside the U.S. dollar. It requires a Salvadoran ID number to register and comes preloaded with $30 in Bitcoin. The price of Bitcoin is down about 14% since it became available for download.
Read more: El Salvador’s Bitcoin Speculators Are Stifled in Chivo Crackdown
Telyatnikov said Alphapoint has implemented security features such as facial and fingerprint recognition and has improved the wallet’s integration into the Lightning Network, improving transaction processing and allowing Chivo to scale up. He said the company’s technology also provides more feedback to users on whether a transaction was successful, and in failed transactions, credits money back to the wallet immediately instead of leaving it pending as in previous cases.
The company has hundreds of employees and offers call center support with offices in Asia for overnight help, he said.
“The government, or Chivo, operates the wallet and has their own teams, but those teams are only as good as the teams they have available to reconcile transactions if a report is made,” Telyatnikov said.
Since making Bitcin legal tender, El Salvador has bought 1,801 of the digital coins. Finance Minister Alejandro Zelaya said last week that more than 4 million people are using the Chivo wallet and the nation’s embrace of cryptocurrency has helped attract foreign investment.
Telyatnikov said El Salvador is becoming AlphaPoint’s hub for Latin America operations and the company is currently hiring in the Central American nation.
©2022 Bloomberg L.P.
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