Paraguay’s President Santiago Peña has been impeached and placed under house arrest following the collapse of Ueno Bank, a digital bank with links to his private business interests. The unanimous vote to remove Peña from office came just minutes after he offered to step down on Thursday, amid a widening crisis triggered by the bank’s collapse earlier in the week.

Senators chose to impeach Peña and charge him with misconduct rather than accept his resignation, effectively stripping him of the immunity usually granted to former presidents. The impeachment charges alleged that Peña had conflicts of interest, manipulated regulatory oversight, diverted pension funds, and participated in an institutional cover-up involving the central bank.

The demise of Ueno Bank has left more than half of Paraguay’s population without access to their savings, with an estimated three million depositors unable to access their funds and pensions. This has led to widespread protests, particularly in the capital city of Asunción.

Peña, who held shares in the company that owned the bank until last year, has denied any wrongdoing. He is due to be questioned on Saturday over allegations of breach of trust, influence peddling, and misappropriation of funds.

The impeachment passed with 44 out of 45 senators voting in favor, with senate president Basilio Núñez finding Peña guilty of “dereliction of duty.” Vice-President Pedro Alliana was subsequently sworn in as interim President until 2028, promising that those affected by the financial collapse will be fully compensated.

Senator Rafael Filizzola described the situation as “the biggest corruption scandal in our democratic history,” while analysts suggest that Peña is likely to face prosecution over the bank’s collapse. Peña’s defense lawyer, Ricardo Preda, has described the allegations as a “reckless accusation” that is “irresponsible and opportunistic.”

In an address to the nation on Thursday, Peña apologized, stating that it was never his intention to betray the trust placed in him. As the crisis continues to unfold, the people of Paraguay await further developments in what has become a significant political and financial scandal for the country.