Puerto Rico Launches Blockchain Council As BitMEX Issues Warning to Tether

The Caribbean island is becoming a global hotspot for crypto investors looking to avoid paying federal and state taxes

The Puerto Rican Department of Economic Development and Trade has announced the launch of a Blockchain Advisory Council to act “unofficially as a kind of filter” to determine which projects can legitimately serve the Puerto Rican population, according to a report by Puerto Rican daily El Nuevo Dia.

The council is comprised of representatives from the public and private sector, including the government’s Chief Information Officer, Luis Orocho, the Secretary of the Treasury, Raul Maldonado, and a host of blockchain investors and entrepreneurs who have residence in Puerto Rico.

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

Also among them is Manuel Laboy Rivera, the territory’s Secretary of Economic Development and Commerce, who believes that blockchain technology “is accelerating economic and social changes worldwide.”

“Puerto Rico wants to be a part of it,” he said.

According to DDEC officers, “industry leaders from the United States” will also be a part of the Council, but no indication as to their identity was given.

Is tether gaining ground in Puerto Rico?

The launch of the council closely coincides with reports that Tether is using the Puerto Rico-based Noble Bank as its primary reserve bank.

The Bitcoin Mercantile Exchange, also known as BitMEX, published a piece of research that explored the link between Tether and the island territory. Following analysis of public financial data, BitMEX found that there had been significant growth in the International Financial Entities banking category.

Initially, this wasn’t enough to prove any kind of connection. However, after comparing the influx of funds from International Financial Entities ($3.3 billion in bank deposits in Q4 2017) and Tether’s Q4 2017 growth spurt (a 215 percent increase to $1.4 billion), BitMEX concluded that the controversial crypto-firm must be a Noble Bank customer.

Suggested articles

Tradefora Completes Integration with Serenity EscrowGo to article >>

The report concluded with a warning to Tether: either reform the network to include the proper KYL/AMC procedures, or risk being shut down by international authorities.

A crypto-paradise?

Tether may have been attracted to Puerto Rico because of the lack of restrictions and regulations on cryptocurrency.

Indeed, some investors are eyeing Puerto Rico as a sort of paradise for blockchain technology and cryptocurrency entrepreneurship and innovation. In a piece entitled ‘Making a Crypto Utopia in Puerto Rico’ that was published in early February, The New York Times told the story of “dozens” of crypto-entrepreneurs who were establishing residency on the island to avoid paying federal and state taxes on their newfound fortunes.

The Times spoke of how these entrepreneurs plan to build “a new city where the money is virtual and the contracts are all public, to show the rest of the world what a crypto future could look like.”

In spite of their hopeful attitudes, however, the United States government is gaining momentum in its effort to regulate crypto. It may only be a matter of time before the same laws that apply to crypto on the mainland reach the island. Still, we can hope that the blockchain industry brings more consistent funding to the hurricane-stricken territory.

Got a news tip? Let Us Know