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Hello, and welcome to another episode of Cold Fusion. It's just another Tuesday. You start your day as usual. On your way to work, you decide to check your banking app. Instead of the usual interface, it's a blank screen with a single line of text. We cannot display the balance, and this is not a failure This was the reality for millions in Paraguay on November 3, 2026. A few hours ago, the country's central bank announced the takeover of Gueno Bank. This was a massive deal because about 3 million people use Gueno's services, about 60% of the adult population. For 280,000 of them, it was the only bank they had. Their salaries, their savings-it was all placed there, and
overnight they lost access to a single cent. The bank has been gripped by political turmoil following a banking scandal that has put its president and core institutions under scrutiny. Paraguayan prosecutors allege that Gueno's owners secretly transferred depositors' money to their own companies, and somehow the country's president, Santiago Peña, is also allegedly involved. As the news spread, public anger erupted. Panicking, customers crowded around locked branches as protesters marched to Congress. Riot police used rubber bullets and pepper spray to control them. It was chaos.
Within a week, Congress removed the country's president from office, and he is now being held at a military facility in the capital. Watching this from the other side of the world, some might just shrug their shoulders as if it's someone else's problem. But the thing is, most of us live our entire financial lives with the help of one or two apps. Imagine opening yours tomorrow and seeing the same message. For millions of Paraguayans, that is exactly what happened. So how did the country's largest bank go catastrophically bankrupt so quickly and take the president with it?
Could something like this happen live? Let's see. You are watching Cold Fusion TV. When a bank counts the majority of the country's adult population as customers, there is no doubt that it is the largest bank in the country by number of employees. In addition, Weyn0 managed between $800 million and $850 million in government funds. Although at first it was modest. In September 2021, family-owned conglomerate Grupo Bascas bought an old, low-profile lender called Financiera El Comercio and renamed it Weyn0. The takeover was led by Miguel Bascas, a young businessman from the family, and he had big plans for it. For him, this was a huge opportunity, as in 2021, approximately half of all adults in Paraguay did not have a bank account.
According to the World Bank, fewer than two in 10 people had a debit or credit card. In November 2023, the central bank transformed Weyn0 into a full-fledged bank by granting it a banking license. To win customers, Weyn0 made joining incredibly easy. You could open an account on your phone in less than 4 minutes, and every time you bought products with your Weyn0 card, you would get some of that money back. It's no wonder people registered en masse. Weyn0 grew rapidly, and soon they were sponsoring the national soccer team and their name was on the stadiums of two of Paraguay's biggest clubs. Does this remind anyone of FTX? In any case, 36-year-old Miguel has spoken openly about creating Paraguay's first
unicorn, a billion- dollar company. By March of this year, Weyn0 had sold $350 million worth of bonds to international investors. For the Paraguayan bank, this was the largest deal of its kind. To most people, it looked like a real success story , but what was happening behind the scenes inside the bank was a completely different story. It turns out they were hiding something, and their actions would lead to disaster and plunge the country into chaos. But before we get to that, this part of the episode is sponsored by Plaud. Every few weeks we brainstorm with the Cold Fusion team without limits. We are discussing a few ideas for future episodes. And interestingly, the idea for this particular episode came about as a
result of one of these conversations. The thing is that these sessions can develop in a variety of directions. We can discuss 10 different topics, explore several interesting angles, and it's not always easy to remember everything we talked about until the end. This is one of the reasons why I use Plaud Note Pro. This is a note-taking assistant about the size of a credit card. I can attach it to the back of my phone or carry it with me in my wallet. I could just record these sessions on my phone, but due to notifications, battery life, and having to search for long recordings afterwards, that's not always the most practical solution. With Plaud, I just press the record button. He then
transcribes the conversation and organizes the important points into a summary. And it's especially useful for those brainstorming sessions. I can go back and see what ideas stood out, what we decided to implement, and what needs to be done next. I can even ask Plaud to find a specific discussion without having to listen to the entire recording again. Plaud is built on enterprise-level privacy and security standards, which is important when recording conversations. For me and the team, it's worth it because we can focus on the conversation itself and not worry about taking notes or forgetting something important. If you regularly hold meetings, discuss ideas, or work in a team, I think you'll find this really useful. You can check out Plaud
Note Pro via the link in the description. Use code Cold Fusion 22 for 22% off. And there is also a 30-day free return policy. Thank you Plaud for supporting Cold Fusion. Now let's get back to history. Behind the scenes, Weino was unfortunately breaking the oldest rule of banking. You see, when a customer deposits money, the bank lends most of it to other people and businesses, and they earn interest on it. This is how commercial banking works in its simplest form. But things get dangerous when the people who own the bank start lending
depositors' money, your money, to themselves. This is the oldest trick in the book, which is why most countries keep it under control. Paraguay limits loans to a bank's own insiders to 20% of its capital. On the other hand, Wayne has crossed that line. Between September 2025 and May 2026, the bank lent about $146 million to three companies, almost twice as much as was authorized. Prosecutors allege that these companies were actually linked to the Barcos family. Consumers' money was immediately returned to the people who owned the bank. These companies had no right to borrow at all. Just to give you an idea, one of them, Grupo Hendy, which was something between eBay and Craigslist, was making about
$11,000 a month. Somehow she got a loan of $42 million. While this money was being spent, Wayne was also falsifying his accounting books. Inspectors found that he was reporting ordinary current expenses as assets. This made the bank look much richer than it actually was. If this accounting mess is corrected, the bank's capital, the safety cushion designed to protect consumer savings, was less than half of the statutory minimum. Simply put, the emperor was naked, and the largest bank in Paraguay ran on exhaust fumes, but on paper it looked healthy. So the question is, how could the bank have gotten away with this for so long? Much of this answer leads directly to the presidency. Santiago Peña, an economist, became president of Paraguay in
August 2023. He owned shares in the group that controlled Weyne and held them until March 2025. For those who follow him closely, this has been going on for a long time in his presidency. Wayne insists he never owned any shares in the bank itself. Even before he took office, Santiago Peña had chosen a man named Carlos Cubalo to be the head of the Central Bank of Paraguay. At the time, Kubalo was still running Financiero Weyne, the credit company that Weyne had once been. Supervision of a country's banks is a primary function of the central bank. So, now the central bank governor controlled the bank he had previously managed. Mr. Fox, meet the chicken and have fun. As expected, this arrangement turned out to be a
disaster. Wayne went from zero public funds when Peña took office in 2023 to about $800 million in November 2026. The largest portion came from IPS, a state fund that pays people pensions and covers their healthcare. His bank accounts had about 355-380 million . About 32,000 pensioners received their IPS pension funds through Gueno itself. Some Paraguayan journalists believe that public money ended up in Gueno intentionally. Whether it was planned or not, time had a distinctive smell, the smell of fish. Santiago Peña had barely settled into his presidency when public money began flowing into a bank run by a group in which he had invested. Of course, eventually the cracks began to show. The Central Bank
has already warned about insider lending. Then, in October, Fitch, one of the world's largest credit rating agencies, warned that it might downgrade Gueno's rating. The president simply brushed it all off, calling it a media campaign. Behind the scenes, Gueno didn't even have the 70 million in emergency reserves he was required to keep by law. The central bank had enough of this, and despite the alleged involvement of the central bank governor, they intervened. And then millions of people opened their apps on that blank screen. For people who have been blocked, the most important question is really, when will they get their money back? But here's the part of the story that's actually reassuring. Fortunately, most
of them will get all their money back. The Paraguayan government guarantees deposits up to 38,000 per person. This covers almost everyone, 97% of those who used Gueno services. But there is one catch. This money will come very slowly. Currently, people can only withdraw about 1,700 each. Anyone who has never used a bank before must first open a new account at another bank. However, the pension fund is of greater concern. IPS will pay the first monthly pension, but the hundreds of millions he had in Gueno far exceed what the guarantee covers. How much of it pensioners will actually receive depends on what remains after the sale of the bank's assets. What really hurts is that people predicted this. Just weeks before the collapse, a group that
included a teachers' union and an IPS members' association demanded that the foundation withdraw its money from Gueno. The president of the foundation promised them a written response. A week later, the bank disappeared. Gueno's own personnel were injured twice. Around 7,000 people working at the bank and other Grupo Bacas companies are now facing layoffs and are demanding unpaid wages. There is a cruel twist to all of this. Gueno's main advantage was that it brought people into the banking system for the first time, and this happened for over a million Paraguayans. For them, their first bank account turned into their first bank failure, and it may be a long time before they start
trusting the bank again. So if you were online and saw the comments under any post about this story, the same concern kept coming up. Could this happen in my country? Honestly, that's unlikely. The Guéno disaster was a story of corruption, negligence, and complete disregard for the law. It was much more than just economics, and a lot of things had to go wrong at the same time. But that doesn't mean it can't happen. History has several examples, and some of them come from much larger economies than Paraguay's. In 2014, Banco Espírito Santo, Portugal's second-largest private bank, went bankrupt after making improper loans to controlling family companies. In 2019,
India's PCM Bank was caught hiding loans to a single developer in more than 21,000 fake accounts. That same year, China seized Baoshang Bank after its largest shareholder used hundreds of shell companies to borrow about $22 billion, which he never repaid. Even Iceland experienced something similar. The company's three largest banks went bankrupt during the 2008 crisis, but an official investigation found that they had been lending freely to their largest shareholders. Banks can also go bankrupt for completely different reasons. In 2023, as we already wrote, Silicon Valley Bank went bankrupt after losses on its bonds caused a panic. Customers tried to withdraw $42 billion in one day. As we also wrote, Credit Suisse collapsed that same
year after years of banking scandals eroded trust in the bank. Wayno was distinguished by this combination of factors. For something like this to happen where you live, insider lending rules would have to remain unenforced. The regulator would either have to be asleep or have close ties to the bank it was supposed to monitor. In addition, the bank would have to sit on a mountain of public money. Most developed countries have a social protection system for just such situations. In the US, the FDIC guarantees deposits up to $250,000 per person per bank. The financial claims scheme in Australia covers the same amount, and in the UK it is £120,000.
However, as Paraguayans are finding out, it takes time for this social protection system to work. That's why financial experts advise spreading your money among several banks so that one bankrupt can't freeze everything you have. These 280,000 Paraguayans had it all in Wayno, and they learned it the hard way So back to Paraguay, the consequences came quickly and the people led by Wayno were the first to suffer. Miguel Basquies, the young founder, was taken into police custody hours after a warrant was issued for his arrest. The judge sent him and five other
leaders to prison to await trial. A total of 27 people have been charged so far. However, this is only one part of the investigation. The Attorney General is pursuing three separate cases. They are investigating how Wayno was controlled and how he ended up keeping such a large portion of public money. It is in this last part that the president comes into play. Prosecutors say President Santiago Peña used his position to try to divert public funds to Wayno, and he kept regulators at bay even when red flags arose. The lawmakers who impeached him believe he also had a personal motive. In their view, every dollar of public funds that went into Wayno helped the Basquez group grow, which in turn made Pena's own shares more valuable. They also raised eyebrows about how
quickly his personal fortune was growing. Then the knife came from his own side. Horacio Cartes, a member of the president's party and the man who supported his rise to power, publicly turned his back on him. He said, and I quote: "We will not stand by the theft of public, private, and pension funds. We must think about the people and values we support in the Colorado Party. We support the impeachment of the President of the Republic, Santiago Peña, in order to restore institutional order in the Republic." With his own party against him, Peña attempted to resign with an apology. Congress kicked him out anyway, and that prevented him from retiring to a lifetime Senate seat with immunity.
He has now been charged with breach of trust and using his position for personal gain. Peña's lawyer says he is pleading not guilty and none of this has yet been tested in court, but at the same time his home has been searched by authorities. Even the president's successor has answers to questions. Pedro Alliana, Peña's vice president who currently runs the country, is also under investigation for his ties to Veino. On top of everything, the public is outraged after a photo of the president's door emerged. This is her in a selfie at the gym wearing a T-shirt that says, " Tax the poor." No comments. For a few short years, Wayno looked like proof that a small country could build something world- class. He brought millions into
banking, put his name on football stadiums, and attracted investors to Wall Street. Then, in less than a week, it all spiraled into a catastrophic collapse, with riots in the streets and the former president in custody. Many Paraguayans now want to know why, after months of warnings, it took a complete collapse before anyone took action. Fortunately, most Weyno customers will eventually get their money back, but regaining trust in the banking system is a whole other matter. So here's something to think about. Do you know who is monitoring your bank? Who did they work for before? It's worth thinking about. But anyway, let me know what you think about this story in the comments section below. That's
all from me. My name is Dagogo. If you enjoyed it, feel free to subscribe to Cold Fusion. Also, if you want to watch my latest video about a man who could have been a billionaire but decided to leave, I'll leave a link to it in the description. Okay, so you watched Cold Fusion, and I'll see you again soon in the next episode. Hurray, guys. Enjoy your viewing. Cold Fusion is a new way of thinking.
