Paraguay’s President Santiago Peña faced impeachment and house arrest following the collapse of Ueno Bank, a digital lender in which he held shares. The bank’s failure affected approximately 3 million customers, representing more than half of Paraguay’s adult population, and triggered widespread financial disruption across the country.
Peña, characterized as a pro-market leader and close U.S. ally in the region, announced his resignation on Thursday. However, lawmakers declined to accept the resignation and proceeded with impeachment proceedings. On Friday, senators unanimously voted to find Peña guilty of malfeasance in office, according to the Senate’s official records. Prosecutors subsequently charged him with breach of trust and related offenses before placing him under house arrest. Peña appeared before prosecutors the following morning.
Legislators alleged that Peña jeopardized state assets and benefited himself through his connection to the bank. In a statement posted to social media, Peña expressed regret, saying he wanted to apologize to Paraguayan citizens if he had disappointed them. He denied wrongdoing despite the legal proceedings.
Paraguay’s central bank had seized control of Ueno Bank on Tuesday, determining that its solvency ratio no longer met regulatory standards. The seizure prompted protests in Asunción, the capital city. Vice President Pedro Alliana was sworn in as president to complete Peña’s term through August 2028 and pledged to pursue compensation for those who lost money in the bank’s collapse. Peña represents the first president to be removed from office in Paraguay since Fernando Lugo in 2012.
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