El Salvador removes bitcoin pricing feature scalpers were exploiting on its Chivo system
- El Salvador yanks a feature on its Chivo network that people were illegally using to profit from
bitcointrades, Bloomberg reported.
- The price-freezing feature gave users time to check bitcoin rates on other exchanges and decide whether to buy or sell.
- Users said the Chivo wallet is now restricting trades to one every three minutes.
El Salvador has taken away a pricing feature on its Chivo bitcoin network that people were illegally using to profit quickly from transactions with the cryptocurrency, according to a Bloomberg report.
Chivo no longer freezes bitcoin's price for one minute before confirming a trade. The feature gave users time to check bitcoin pricing on other cryptocurrency exchanges and decide whether to buy or sell, an activity called scalping.
"Unfortunately many of our users used it for scalping, which is legal but without the option of having a frozen rate," according to a translated Twitter post from Chivo. "Doing it with a frozen rate, comparing it with other exchanges in real time is a type of fraud."
El Salvador in September became the first country in the world to allow bitcoin as a payment option and, with that, rolled out its Chivo crypto wallet.
With last week's change in the pricing feature, users said the wallet is now restricting trades to one every three minutes and that the price at which they sell bitcoin isn't the rate they receive when a transaction is approved, the report published Monday said.
A programmer in El Salvador who has closely tracked the Chivo rollout said it's unclear if the price difference is a fee for using the wallet, a spread charged by Chivo, or the result of price swings during the three-minute delay.
Bitcoin during Monday's session rose 4% to $62,967.52. Last week, the world's most-traded cryptocurrency reached an all-time high of $66,930.39, according to CoinMarketCap, a day after the first bitcoin-futures ETF launched.
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