Gold bug Peter Schiff says he would accept payment in bitcoin (BTC) in the event regulators allowed him to sell his embattled bank, Euro Pacific.
The outspoken bitcoin critic vowed to fight after the financial regulator in Puero Rico recently shut down the San Juan-based bank over allegations of insolvency and a lack of compliance and internal controls.
Schiff claims to have found a buyer to takeover Euro Pacific Bank for a total of $24.5 million. He wants the regulator “to allow the planned sale so customers will be protected,” and not “needlessly lose money” via receivership.
Desperate Schiff would sell bank for “anything,” even BTC
The economist has been relentless in his defense of the bank on Twitter. He would be willing to dispose of Euro Pacific Bank at any cost, even if that meant taking bitcoin, a currency he abhors, as payment.
“Actually yes, I would sell the bank for anything if regulators let me sell it,” said Schiff, in response to a question from one user who wanted to know whether he would be open to selling the bank for BTC. “My main goal is protecting customers.”
It is an incredible about-turn from one of bitcoin’s fiercest critics. But it seems more plausible that Schiff’s recourse to BTC, a currency he has routinely attacked as lacking intrinsic value, is an act of desperation.
Earlier, he stressed that the bank, which has been the focus of an international investigation over tax evasion and money laundering, “was not put into receivership for being insolvent.”
“It was put there for being undercapitalized, not having no capital,” stated Schiff. “My bank has about $2 million in capital, no debt, no loans, and enough cash to repay all depositors in full. The buyer was to add $7 million in capital.”
He repeated a previous claim that he had invested $7 million of his own money into Euro Pacific Bank over the past two years, “most of which was lost due to the false allegations of money laundering and tax evasion…”
“That’s why the only viable path forward was to sell the bank so it could be rebranded under new ownership,” Schiff proposed.
Schiff: bank targeted due to ‘my criticism of excess government taxation’
Puerto Rico’s Office of the Commissioner of Financial Institutions ordered the shut down of Euro Pacific Bank due to allegations of insolvency.
Natalia Zequeira Díaz, a commissioner with the regulator, said: “Euro Pacific has a long history of noncompliance.”
The cease-and-desist order stated that Euro Pacific had a net loss of about $751,000 in 2019 and amassed almost $4 million in total losses. It added that at the end of 2020, the bank had negative capital of $1.3 million, which made it insolvent.
Two years earlier, a group of tax authorities callled Joints Chief of Global Tax Enforcement, or J5, began investigating Schiff’s bank “to put a stop to the suspected facilitation of offshore tax evasion and money laundering by the bank.”
Schiff said J5 cleared the bank of wrong-doing, “but instead of praising the bank, it pressured [Puerto Rico] regulators to shut it down.” He alleged that the institution was targeted “due to my outspoken criticism of excess government taxation and regulation.”
He said he remained “committed to working with the Puerto Rico banking commissioner to resolve the capital issues with my bank for the best interest of all the bank’s customers.”