- Puerto Rico regulators have issued a cease and desist order to a bank owned by bitcoin critic Peter Schiff
- BTC price at time of writing – $19,988.88
- The bank is being investigated over allegations of tax evasion and money laundering
The news prompted a quick reaction from some members of the bitcoin community, who took the opportunity to remind the old enemy of the limitations of traditional finance while welcoming BTC’s censorship-resistant credentials.
Puerto Rico’s Office of the Commissioner of Financial Institutions has ordered the closure of San Juan-based international bank Euro Pacific due to allegations of insolvency and a lack of compliance and internal controls, according to the Washington Post. .
In 2020, a group of tax authorities called the Joint Chief of Global Tax Enforcement, or J5, began investigating Schiff’s bank to stop alleged facilitation of offshore tax evasion and money laundering. money from the bank.
Euro Pacific has a history of non-compliance
The governments of the United States, Australia, United Kingdom, Canada and the Netherlands created the J5 in 2018 to combat international financial crimes involving tax evasion and money laundering.
Euro Pacific has a long history of non-compliance, said Puerto Rico regulator Natalia Zequeira Díaz.
She added that the Bureau would not allow or condone any financial entity with a license issued by the government of Puerto Rico to operate outside the law or ignore the clear mandates of applicable laws and regulations.
The cease and desist order reportedly said Euro Pacific suffered a net loss of approximately $751,000 in 2019 and accumulated nearly $4 million in total losses. He added that at the end of 2020, the bank had negative capital of $1.3 million:
As such, the entity is classified as insolvent, the order says. Euro Pacific posted a net loss of about $550,000 in the first three months of this year, he said. Following the order, customers lost access to their accounts and withdrawals were halted.
Schiff founded Euro Pacific Bank in 2011, establishing subsidiaries in the Caribbean, and reportedly grew to 15,000 accounts within two years of starting operations. Six years later, the bank received a license in the US territory of Puerto Rico and settled there.
But deposits plummeted to $150 million following the J5 probe and customers left. Writing on Twitter, Schiff denied the bank was insolvent.
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The closure of Schiff’s bank invites ridicule
In cryptocurrency circles, Peter Schiff is known for his harsh criticism of bitcoin (BTC). In one of its many reviews, the gold bug said that bitcoin fails both as money and as a store of value because it lacks utility and intrinsic value.
Reacting to the Euro Pacific Bank shutdown, several members of the Bitcoin community took the opportunity to mock Schiff over his past and uncharitable comments about crypto. They also touted bitcoin’s credentials as a censorship-resistant currency that can solve problems of unwanted government interference.