Government Sponsored Bitcoin Exchange Collecting Donations For Chile’s Earthquake Victims

On September 16, an 8.3 magnitude earthquake occurred just off the coast of Chile, west of Illapel, approximately 142 miles northwest of Chile’s capital city, Santiago. This earthquake was the strongest of 2015, even more powerful than the M7.8 earthquake which struck east of Khudi, Nepal, in April.

It was the worst earthquake felt in Chile since 2010, when the 8.8-magnitude Maule earthquake devastated central Chile. At least 525 people died, and cost as much as US$7 billion.

Around one million people were evacuated this time, giving residents enough time to seek higher, safer ground. Chileans have practised the move many times before, and it helped save lives this time around.

On Saturday, the regional offices of the National Emergency Office of the Ministry of Interior and Public Security (ONEMI) reported a total of 13 people dead and 11 injured. Chilean Officials have declared the towns of Coquimbo and Tongoy catastrophe zones.

A string of aftershocks has also caused secondary hazards such as tsunamis, landslides, and ground liquefaction. Despite the devastation, most have returned home. Locals are calling the entire city of Illapel “a complete loss.”

The US Geological Survey (USGS) quickly stated that “significant damage is likely and the disaster is potentially widespread,” giving possible economic losses an Orange alert level. The agency asserted that “past events with this alert level have required a regional or national level response.”

Since the main quake on Wednesday, the USGS has recorded seven more significant, although smaller earthquakes in the region, ranging from 6.2 to 7.0. The latest one, at the time of reporting, was magnitude 6.2, hitting west of La Ligua, approximately 114 miles northwest of Santiago.

The USGS estimates the damage will cost US$2 billion, a high figure for the beleaguered economy. Chile experienced a sharp economic slowdown in 2014, with its GDP growth rate falling to 1.9% from an average of over 5% in previous years.

The slowdown is being driven by a contraction in investment, decline in copper prices and a decrease in private consumption. Meanwhile, unemployment rose from 5.7% in November 2013 to 6.5% in 2014.

The decelerating economy is leading to a reduction in government tax receipts, with the government predicting approximately US$2 billion less revenue than projected in the current budget. Chile is also still in debt from the 2010 earthquake.

In response to these needs, Santiago-based bitcoin exchange SurBTC immediately set up a bitcoin donation program in an effort to raise money to help survivors. Chile’s largest and most popular bitcoin exchange launched in early April 2015, with unprecedented economic support from the Chilean Government Fund (CORFO), and is under the supervision of Chile’s version of FinCEN, the UAF.

SurBTC may be the only case of a government directly funding a bitcoin exchange startup.

Guillermo Torrealba, CEO and co-founder of SurBTC, told Latin America tech news outlet FayerWayer, “[…] for this technology to fulfill its promise to transform the way that much of global finance operates, you must first fill it with responsible companies that offer products and services that not only seek returns, but which will help to develop this emerging industry.”

“We are interpreting this ‘responsibility,’ offering a very transparent, secure exchange and open to other entrepreneurs to connect and develop their own solutions.”
— – Guillermo Torrealba, SurBTC CEO and Co-Founder

The Bitcoin startup received $40,000 from the Chilean government equity-free, as part of one the state’s startup initiatives. According to a press release, the SurBTC team felt it was “extraordinary validation,” as it was the first time the Chilean government had given money to a Bitcoin startup.

Chile’s first formal bitcoin exchange has set up a special account to help collect donations. All bitcoin will be converted to Chilean Peso, with zero conversion fees, and no fees on deposits and withdrawals. All transactions are commission free.

The money collected by SurBTC will be given to ChileAyuda, an online-only project started by Chileans to help victims of the 2010 earthquake.

The projects track record of helping the 2010 earthquake survivors, along with the similarity of the two disasters, were key reasons why SurBTC chose them to help distribute the donations.

Despite being the fastest to respond, other charities have also set up operations in Chile. Direct Relief, which accepts bitcoin donations directly, has reached out to its local partners in Chile to assess the potential need for medical support. Sending bitcoin donations to Direct Relief is as easy as using a QR code, over Twitter, or via Changetip.

For people who know someone in the region that was affected, a more direct way to donate bitcoins to help with their situation is to simply send them some bitcoin, and tell them where it can be cashed out for the Pesos they will need in this time of crisis.

Around Santiago, it is easy to get bitcoin out of an ATM machine, at least in parts of the city that have electricity flowing. Solutions from SurBTC, Cex.io (using astropay) and BitEx.la (at their offices), all allow bitcoin holders to cash out for Pesos quickly.