Paraguay's president, Santiago Peña , has been impeached and arrested amid a financial crisis that sparked mass protests and turned even his own Colorado party against him.
The crisis was sparked by the order issued earlier this week to declare a large digital bank bankrupt.
Peña previously had shares in the parent company that owned digital lender Ueno Bank . Peña has denied allegations that he helped shield Ueno Bank from inspections.
In addition to holding public funds, Ueno Bank had millions of private citizens as customers, who are now left without access to their accounts.
In a statement announcing his resignation on Thursday, posted on Facebook, Peña said his "greatest wish" was for the funds to be returned to Ueno's clients. He said he was resigning to "bring peace to the population."
By then, the streets of downtown Asunción, the country's capital, were packed with protesters. In the Chamber of Deputies, both his allies and opponents rejected Peña's resignation and instead continued with the impeachment process.
The case then went to the senators, who held an extraordinary session on Friday. Peña did not appear in person for his defense in the Senate, but sent his lawyer, Ricardo Preda.
Preda argued that Peña was "accused of actions that belong to institutions, such as the Central Bank of Paraguay and the Social Security Institute, over which the president has no power or influence," according to a report published by the Senate.
The Senate rejected Peña's resignation, voting unanimously to remove him on grounds of misconduct, according to a report documenting the proceedings.
Under Paraguay's constitution, the distinction between accepting a resignation and holding an impeachment trial is fundamental. If the Senate had accepted his resignation, Peña would have retained immunity, which would have protected him from any judicial investigation.
Following the dismissal, the National Police immediately issued an arrest warrant for Peña, who is accused of breach of trust, exercising illegal influence, and embezzlement of funds.
Peña was placed under house arrest and police forces were positioned around his apartment, while a large group of protesters gathered outside.
Peña will be succeeded by Pedro Alliana, who must complete the remainder of the presidential term that began in 2023 and runs until August 2028. Alliana will now have to deal with the economic crisis that has plunged the country into turmoil.
"Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated," Alliana was quoted as saying.