DEVELOPING: Peter Schiff’s Bank Shut Down, Accused of Money LaunderingJuly 4, 2022 7:22 pm
I want to say two things right off the bat before we jump into this article.
First, I do not dislike Peter Schiff.
I know it’s common in crypto to dislike Schiff because of all his hate for Bitcoin…
I know people like to call him Peter “Shill” because he’s always shilling gold.
But that’s not my take.
I don’t dislike him.
He’s a gold guy, and I like gold too.
We support precious metals and crypto here at ProCoinNews so there’s no hate for Peter Schiff.
He’s right about a lot of things.
Second, Schiff has not been convicted of ANY wrongdoing and he vigorously defends his innocence, as we’ll see in a moment.
Now, with those disclaimers out of the way, here’s the breaking news…
JUST IN: Puerto Rican Bank operated by Peter Schiff has been shut down by authorities amid a global money-laundering & tax evasion scheme investigation by IRS. pic.twitter.com/bLMTEoOHDd
— CryptoWhale (@CryptoWhale) July 4, 2022
Note it says “investigation” and not “conviction”.
I repeat: Peter Schiff has not been found guilty of anything right now, and anyone who dislikes the government and promotes taking your financial condition into your own hands is much more friend than foe in my estimation, so we’re standing by Schiff and hoping he is cleared of all wrongdoing.
We don’t like witch hunts here at ProCoinNews.
The fact is, the U.S. regulatory environment has become so convoluted and complex that it’s nearly impossible to operate in (Exhibit A, the SEC vs. Ripple case, need I say more?).
And that IS a fact.
But Schiff has been accused and he is under investigation, that is true:
Peter Schiff seems to have run into some serious tax evasion problems. He’s tried to sell me on moving to Puerto Rico several times for tax reasons… – and he still hasn’t figured out bitcoin… https://t.co/aRAZ9fxmLw
— Ross Gerber (@GerberKawasaki) July 4, 2022
Here’s more, from the Washington Post:
U.S. financial analyst Peter Schiff told The Associated Press on Friday that he will fight to be able to sell a bank he established in Puerto Rico even though authorities have suspended its operations as part of an investigation.
Euro Pacific International Bank obtained a license in 2017 to operate in the U.S. territory and built up some 15,000 accounts two years later, but its deposits have dropped to $150 million and it lost customers after the Joints Chief of Global Tax Enforcement — a multi-government group fighting tax crimes and money laundering — said it acted two years ago “to put a stop to the suspected facilitation of offshore tax evasion and money laundering by the bank.”
“We lost a lot of things because people were afraid,” Schiff said.
He added that while he doesn’t like anti-money-laundering rules, or regulations or taxes, he does abide by them.
“The fact that I’m so willing to publicly criticize rules, you better believe I’m doing all I can not to break them,” he said.
The so-called J5 agency, whose members are the U.S., the UK, Canada, Australia and the Netherlands, said Thursday that an investigation into the bank is still ongoing, although it declined to provide details.
Schiff said that was a lie, that the bank has never been investigated. He said agents with the Internal Revenue Service visited the bank in 2020 and told him they were investigating customers of the bank.
“Our compliance is so rigorous, and we close accounts so quickly,” he said, adding that he never took clients related to cryptocurrency, cannabis or other fields. “I did everything by the book, and it cost me a fortune.”
A spokeswoman for J5 did not return a message for comment Friday.
Schiff said he also was upset that the bank’s operations were suspended by Puerto Rico’s Office of the Commissioner of Financial Institutions, which announced the move on Thursday and accused the bank of a lack of internal controls, a lack of compliance and a level of insolvency. Officials noted it was separate from the J5 probe.
“It’s a huge shock that they’ve done this,” Schiff said of the bank’s suspended operations.
Schiff said that while he didn’t realize the bank was undercapitalized until it was audited, he stressed it was not a matter of solvency but regulatory minimum capital requirements.
He said the bank always has had a positive net worth and that while there was a deficiency based on deposits, the commissioner told him not to worry because a buyer had appeared.
Schiff said a Houston-based bank wanted to buy Euro Pacific International Bank and that he submitted an application in January to start the process.
“They were going to rename it, rebrand it, so it would no longer have that stigma,” he said.
Natalia Zequeira, commissioner for Puerto Rico’s Office of the Commissioner of Financial Institutions, told The Associated Press on Friday that she doesn’t understand why Schiff was surprised by the agency action since the office met with him in October and he signed a consent form to make the changes required.
She added that the bank submitted a business plan, capital plan and strategic plan that her office did not approve, and said the bank did not refile those or correct deficiencies.
“Surprises like the one Mr. Schiff had yesterday are a result of not reading the fine print of your regulator,” she said.
Schiff himself has already responded and looks ready to fight:
Despite no evidence of crimes, Puerto Rico regulators closed my bank anyway for net capital issues, rather than allow a sale to a highly qualified buyer promising to inject capital far in excess of regulatory minimums. As a result accounts are frozen and customers may lose money.
— Peter Schiff (@PeterSchiff) July 3, 2022
Here's another headline you won't read. Peter Schiff's bank falsely accused by the media of facilitating tax evasion and money laundering is being closed, because even though it's innocent, it's premature conviction by the media ruined its reputation and crippled it financially.
— Peter Schiff (@PeterSchiff) July 4, 2022
Criminal investigations are supposed to be kept secret to protect the innocent in case no evidence is found to bring charges. In my case the IRS illegally leaked the investigation to the media, which then convicted me of crimes there was no evidence to charge me with committing.
— Peter Schiff (@PeterSchiff) July 4, 2022
As I’ve already said, I’m on Schiff’s side for no other reason than the fact I’m against opaque, arbitrary and capricious government over-reach.
And I can see the tide turning.
I see Elon Musk who has already had his run-ins with the SEC growing stronger and more vocal in his criticism of the agency..and more powerful in general. He’s exactly the type of Maverick we need to lead this charge.
I see Ripple absolutely running circles around the SEC in their current case with rumors circulating they have already turned down one settlement offer.
And then I see the new EPA / West Virginia Supreme Court case that was quietly the most important case of the batch of cases recently decided, even if Dobbs got all the attention.
DAI is right in his assessment that the new ruling by the Supreme Court could turn Government Agencies on their heads and cut their power off at the knees:
🚨Breaking Biggest Case In Supreme Court History?🚨This could affect everything including crypto. The Securities and Exchange Commission (SEC) is a federal administrative agency tasked with monitoring markets, enforcing securities laws, and developing new regulations. pic.twitter.com/zPl9FF64B2
— Digital Asset Investor (@digitalassetbuy) June 30, 2022
We cover more of that case here:
So with all of those stars aligning, we wonder if it isn’t time for the people to rise up (peacefully) and reclaim the power that has slowly been taken by them over the last several decades.
The SEC protects the people about as much as the Dept. of Homeland Security “protects” me by groping my body cavities every time I want to take a simple flight to Cleveland.
Power grabs under the guise of “protection” need to come to an end.
To paraphrase a quote often attributed to Ben Franklin:
“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”
Still, several Bitcoin maxis couldn’t help but take a victory lap after the Schiff announcement came out and they’re not entirely wrong either.
Pete, might be time to add some cryptos to that portfolio!
Peter Schiff, who sees no real world use for Bitcoin, has his bank shut down and his customers will be losing money. Ironic. https://t.co/w8NICSKwqa
— Lift the Veil (@lifttheveil411) July 4, 2022
Peter Schiff's bank accounts were just closed #Bitcoin 👏 fixes 👏 this 👏
— Bitcoin Magazine (@BitcoinMagazine) July 4, 2022
Godspeed Peter, for our part we’ve got your back.
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