Puerto Rico has become a hot destination for Crypto millionaires and billionaires.
Yes, they're fond of Puerto Rico's incredibly loose tax policies and
so there are flooding into the country or I should say to the to the US.
Puerto Rico is part of the United States US territory
to essentially use it as a tax shelter.
So I got a glimpse of what the governor of Puerto Rico had to say about this.
He used to be against the current tax policies that have been implemented in
Puerto Rico following Hurricane Maria.
But now all of a sudden he is using completely different talking points to
support the fact that it's become a massive tax shelter for
these billionaires and millionaires let's watch.
>> Crypto millionaires are flocking to Puerto Rico that's because if you spend
at least half the year on the island, you're free of taxes on capital gains.
What a deal,
the former Republican Governor of Puerto Rico Luis Fortuno joins me now.
Good morning to you, governor is Puerto Rico the new tax haven now for
crypto millionaires.
>> Well, Stuart if people are moving from California and
New York to Florida or Texas.
We wanted to consider Puerto Rico as well.
We are part of the US, we are American citizens but
we do not pay federal income tax.
We pay local taxes.
>> Well Governor Puerto Rico has a poverty rate around 40%,
my question to you is what does Puerto Rico get out of it.
How do those people benefit from this migration.
>> New capital, that's influx of capital and jobs on the one hand,
all these people, these are type papers, individuals,
they don't sit around watching TV all day.
They wanna go out and they're investing in the local economy.
>> John apparently you can use the argument of jobs in any context,
including in the context of crypto millionaires and
billionaires flooding into a country specifically to avoid paying taxes.
>> Yeah.
>> And I'm not entirely sure how that creates jobs in Puerto Rico and
in fact I will give you examples of how this has actually been incredibly
damaging to the people of Puerto Rico.
But maybe I'm wrong, I don't know, tell me what you think.
>> Yeah, look,
the personal financial interests of wealthy people is always presented to
the masses as being fundamentally about improving their standard of living.
Whether they call it trickle down economics or
putting a focus on jobs or whatever they do that.
It's always fake, they don't give a damn about jobs,
they replaced you with a robot or a microwave if they could.
In this case though, like look, I am hardly a crypto expert.
And so I'll provide that as an opening for people who their entire personality has
been replaced with an obsession with crypto to go into the chat and
talk about it.
The connection between their personal financial interests when it's like
crypto or an ape painting the connection between that and jobs is obviously
1000 times even more tenuous than regular a whole investor talk.
It's not about that at all.
They wanna go there and I guess technically live there, although what does
it even mean for any of these millionaires to technically live somewhere.
They can go literally anywhere they wanted to drop that and do, to get lower taxes.
And yes, incidentally, they might spend a little bit of money,
they might go to a restaurant or something.
But they are not there to invest, they're not there to create jobs.
>> They're not there to look out for the local community and for those who might be
watching this video and who really believe in Cryptocurrency and you're genuine.
Maybe you've made some money off Cryptocurrency just go
to YouTube later, watch the show 1st obviously.
And type in in the search bar, Bitcoin or Cryptocurrency pump and
dump and you will be amazed at how many tutorials there are.
On how you can get rich from crypto pump and dump schemes,
not news stories about it, literal tutorials on how to engage in it.
>> Yeah.
>> Okay, so I'm sorry for everyone who's like, no man, Cryptocurrency is the future
man, he's not in the future, man it's now it's democratizing everything.
It's the same Silicon valley libertarian types by the way,
who are spewing that nonsense.
And when you look at who's really benefiting from crypto generally speaking,
it is not the little guy, it has not been a process to democratize things, but
let me give you more details.
When it comes to Puerto Rico specifically, some of those Crypto millionaires and
billionaires are not actually interested in doing anything to benefit the local
communities there.
The movement is alarming an earlier generation of Puerto Rico tax
expats like the hedge fund manager Robb Rill.
They call me up saying they're going to literally start a city in Puerto Rico
to have their own crypto world said Mr Rill, who moved to the island in 2013.
I can't engage in that, the newcomers are still debating
the exact shape of Puertopia, or the exact shape that it should take.
Something they need to make a city,
others think it's enough to move into old San Juan and by the way,
you should totally trust them because they definitely have good intentions.
Here's Matt Clementson who is the co founder of lottery dot com,
he's one of these people who believes in this Puerto Rico project.
He says were benevolent capitalists.
So you're a benevolent capitalist building a benevolent economy,
Puerto Rico has been this hidden gem.
This enchanted island that's been consistently overlooked and
mistreated maybe 500 years later, we can make it right.
>> Maybe 500 years later we can do the same thing that's been done for 500 years.
>> Yeah.
>> No, don't trust, and by the way, look,
some people are probably already responding no but you don't understand.
Like Blockchain is this really interesting technology or like that crypto in some
formulation can be good for someone who's not a millionaire.
I'm not disputing literally any of that,
it just doesn't have anything to do with how crypto is manifesting.
What this story is about for like the technology that underlies the ability to
create custom pharmaceuticals can be great and you can also get an opioid epidemic.
You can monetize almost any good development for bad ends and
that is what we're seeing.
I'm sure there's great stuff with Blockchain.
I'm sure NFTS can benefit some small artists but
right now it is being used by people who are already wealthy to get wealthier.
And the Crypto millionaires are there because they're the people involved in
crypto who didn't have literally every dollar they owned stolen from them.
Crypto wealth is built on people who invested in crypto and lost it all,
that is effectively what it is.
If you'd like to roll the dice then you can participate in that.
Maybe you'll get rich but it is hardly a sure thing, it's being presented as that
because people who are in charge of the system are gonna benefit no matter what.
>> Also the tax breaks that the crypto millionaires and
billionaires are taking advantage of does not apply to native Puerto Ricans,
I want to be clear about that.
So there's this double standard in the tax system in Puerto Rico and natives I mean,
I think it's more important to hear from the local communities in Puerto Rico.
How do they feel about it?
It's one thing to hear from the individuals who have benefited from
cryptocurrency and stand to benefit further from the tax laws in Puerto Rico.
But I don't trust them, I would rather hear from people living in Puerto Rico who
have grown up in Puerto Rico and they're not too happy about this.
In fact, there's a growing movement to do something about it.
So one person says this what's happened here is a perfect storm,
said Halsey Minor, the founder of the new site CNET.
Who is moving his new Blockchain company called Videocoin from the Cayman
islands to Puerto Rico this winter referring to Hurricane Maria.
And the investment interest that has followed,
he added while it was really bad for the people of Puerto Rico in
the long term it's a godsend if people look past that.
That was a real that I just read you a statement verbatim, but
it doesn't stop there.
So Andrea Satz says we're the tax playground for the rich where the test
case for anyone who wants to experiment, outsiders, get tax exemptions.
The locals can't get permits and
gentrification has ended up being a huge problem as a result of this.
More than 142,000 locals fled the island in the first year after the storm,
according to the Census Bureau, as real estate prices dropped,
investors moved in and have driven up prices again in certain areas.
The result is that many Puerto Ricans can no longer afford to live in their own
neighborhoods, including those who would like to come back home, activists say.
The tax break laws are exacerbating the problem as people moved to the island and
snap up property.
And I want you to hear from Bianca,
she is an independent reporter who lives in Puerto Rico and she has noticed how her
community where she grew up has changed as a result of all of this, let's watch.
>> Today, I found out that the land behind my house, the one that you see in my
videos all the time where the horses that I give water to live.
The land that gives me access to the beach,
that land is being sold to a company that develops luxury apartments.
You might have heard that Puerto Ricans are worried that our land is being
bought up.
And this is an example of that, this is private land, but
it's also protected land.
The government set it aside for agricultural purposes and
it's also supposed to be protected for its environmental value.
But I happen to be doing a story about this before it hits so close to home and
everyone I talk to says those laws are not being respected.
And that land that was supposed to be protected is getting developed.
So I'm making this video not as a reporter, but
as a Puerto Rican who's sad and scared that Puerto Rico is becoming a place
where only the wealthy have access to our most beautiful natural resources.
>> So that video went viral and following that, it appears that
the government declared the 7400 acres of land as nature and
agricultural reserves, including the beach that Bianca fought to save.
So there was a positive update to that.
But the reason why I wanted to share that part of the story with you is because
the same tax policies that these crypto fanatics are taking advantage of.
Obviously will also be taken advantage of by other individuals,
including real estate developers and
those who stand to profit off of raping and pillaging this land.
And it's a huge issue and anyone who makes this argument that like no,
no it creates jobs.
We've seen that argument and how it actually plays out in the mainland, and
it does not actually play out the way that they would have you believe.
And then finally, I do have to get to the inequality that's really baked into
cryptocurrency because I think that's usually left out of the cheery stories
that we hear from proponents of Cryptocurrency.
And how things are playing out right now.
Let's go to graphic nine, a study by the National Bureau of Economic Research
showed that the top 10,000 bitcoin accounts hold
five million bitcoins an equivalent of approximately $232 billion.
With an estimated 114 million people globally holding the cryptocurrency
according to crypto dot com.
That means that approximately 0.1% of bitcoin
holders control 27% of the 19 million bitcoins in circulation.
And I should also be clear that the thing that seems to be the most
admired about cryptocurrency is the lack of regulation.
They love the fact that there's very little regulation involved which is
why these pump and dump schemes not only take place,
there are literal tutorials on how to engage in them.
Pump and dump schemes are,
regulated by the SEC in the regular stock market and all of that.
Yes there's all there's still terrible behavior happening in that regard
as well but at least there's like some watchdog.
At least there's some regulation, think about the greed involved here,
think about the lack of regulation.
Think about the money laundering that takes place through cryptocurrency and
I just think this is a perspective that doesn't get shared.
And the reason why it doesn't get shared John is because the value of crypto
is dependent on hype.
It's dependent on people talking about how amazing cryptocurrency is and
it's the future and it's this and that.
It persuades others to invest in it to drive up the price of these
various cryptocurrencies.
>> Exactly which is true of most things but the relationship is perhaps
stronger with cryptocurrency than virtually any other asset.
I do disagree one thing though, I know I the pump and
I think that Elon Musk is just tweeting about particular cryptocurrencies because
he's really into it.
I don't think it's like a money making scheme or anything.
Also, I agree with those in the audience who are saying we think we've heard pump
and dump enough times for the rest of our life actually.
>> [LAUGH].
>> If you could just not ever say that again, please thank you.
>> All right, I will do my best.