The collapse of a major digital bank in Paraguay has triggered a political crisis that has cost President Santiago Peña his job, with senators voting to impeach him over allegations of misconduct as millions of customers remain unable to access their savings and pensions.
Peña was arrested on Friday shortly after lawmakers voted to remove him from office, with members of his own party joining the unanimous decision.
His impeachment followed mounting pressure over the collapse of Ueno Bank earlier in the week and claims linking the financial institution to his private business interests.
The President had offered to leave office on Thursday, but senators rejected his proposed resignation and instead pursued impeachment proceedings, charging him with misconduct.
His removal also stripped him of the immunity normally granted to former presidents.
Peña, who owned shares in the company behind the bank until last year, has denied any wrongdoing.
The bank's collapse has disrupted access to savings for more than half of Paraguay's population after the country's central bank seized the institution. Around three million depositors are still unable to withdraw their money or access their pension funds, triggering protests in several areas, particularly in the capital, Asunción.
The charges presented during the impeachment process accused Peña of having conflicts of interest, interfering with regulatory supervision, diverting pension funds and taking part in an institutional cover-up involving the central bank.
The legal pressure on the former President is also mounting, with prosecutor Silvia Margarita Gonzalez Vester saying he was expected to be questioned on Saturday over alleged breach of trust, influence peddling and misappropriation of funds.
In the Senate, 44 lawmakers voted in favour of impeachment out of the 45-member chamber, while one senator was absent.
After the vote, Senate President Basilio Núñez announced that Peña had been found guilty of "dereliction of duty".
His removal cleared the way for Vice-President Pedro Alliana to assume the presidency. Alliana was subsequently sworn in as interim head of state and is expected to remain in office until 2028.
In his first remarks following the transition, Alliana addressed the financial hardship facing depositors and pledged that those affected would receive compensation.
"Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated," Alliana said.
The scandal has also drawn sharp criticism from lawmakers, with Senator Rafael Filizzola describing the crisis as a major setback for the country's institutions and reputation.
"We are facing the biggest corruption scandal in our democratic history – a tremendous blow to the state, to private citizens, and to the country's credibility and image," Filizzola said.
Analysts believe Peña could now face prosecution over the bank's collapse as scrutiny of his alleged involvement and the handling of the financial crisis continues.