The Koriun case triggers deeper institutional scrutiny and undermines faith in Xiomara Castro’s government

The scheme operated by Koriun Inversiones has shaken Honduras during a period of institutional weakness and political division. Impacting over 35,000 individuals, predominantly in working-class regions in the north, the situation has not only highlighted the vulnerabilities of the financial oversight system but has also posed one of the most intricate challenges for Xiomara Castro’s administration.

The unsupervised management and downfall of the plan

For many years, Koriun Inversiones functioned unlawfully, offering a 20% monthly profit without official registration or oversight by the National Banking and Insurance Commission (CNBS). In spite of public alerts released by this body in February 2025, indicating that the firm was not permitted to collect money from the public, the activities persisted without governmental interference until the Technical Agency for Criminal Investigation (ATIC) and the Public Ministry took action in April that year.

Raids revealed the magnitude of the fraud: more than 358 million lempiras in cash were seized, in addition to 69 million frozen in bank accounts. Investigations concluded that there were no real investments to justify the promised returns, confirming that it was an unsustainable pyramid scheme.

Social reactions and political fallout

The impact of the collapse has been profound, both socially and politically. Thousands of people lost their savings, leading to demonstrations, roadblocks, and protests in different parts of the country, especially in Choloma, where most of the investors were concentrated. The crisis has fueled public discontent with the inaction of local authorities and the gaps in the regulatory system.

Politically, the case has had a negative impact on the government’s image. Criticism has focused on the lack of institutional oversight, the permissiveness that allowed Koriun to operate openly, and the absence of preventive measures by the responsible agencies. Business sectors and civil society organizations have harshly questioned the weakness of the state apparatus in preventing fraud of this nature.

The executive’s plan and the debate

Due to public pressure, the administration declared the creation of legislation to reimburse the impacted individuals, utilizing funds from the nation’s budget. This proposal, mandated by President Xiomara Castro, has sparked significant reactions both in the National Congress and the general populace.

Opposition sectors and citizen groups have rejected the measure, arguing that public money is being used to cover the costs of a private scam, which they consider a dangerous precedent that could encourage impunity and the political exploitation of citizens’ suffering. Despite the official announcement, the bill has not yet been thoroughly discussed, nor has the amount of compensation or its implementation mechanism been defined.

The suggestion has increased conflicts among legislative groups and put the government in a precarious situation, being criticized for both its lack of anticipation and its crisis management approach.

Dangers faced by institutions and political forecasts

The Koriun case calls into question the Honduran state’s ability to guarantee legal certainty and protect citizens from financial fraud. The lack of timely oversight, the permissiveness with which the company operated, and the government’s delayed response have reinforced the perception of institutional inefficiency.

Internationally, the situation could affect the country’s image as a safe destination for investment, while domestically, the handling of the case has contributed to a narrative of erosion that is already affecting the ruling party on other fronts. Amid other allegations of corruption, the Koriun scandal threatens to become yet another symbol of the lack of transparency and state control.

Xiomara Castro’s government thus faces a complex dilemma: responding to a legitimate social crisis without jeopardizing institutional credibility or exacerbating the climate of polarization. How this situation is handled will be decisive for its political stability and for the level of trust that citizens maintain in public institutions.