Tax laws

Crypto influencers move to Puerto Rico due to tax laws. Positive?

The last The Times article qualifies Puerto Rico as “the home of one of the world’s premier cryptocurrency communities”. Are they exaggerating or are they onto something? Apparently, favorable tax laws brought “10,000 well-heeled American migrants” to the island. Of these, “approximately 3,000 of the arrivals are newly minted cryptocurrency millionaires” and “approximately 4,000 businesses and high net worth individuals have moved to Puerto Rico”.

These figures are certainly exaggerated, but the article is generally well written. The author, however, is a newcomer to cryptocurrency and uses cliché-riddled phrases like “a new currency invented in a flash” and “instant millionaires.” He also calls the industry “one of the most energy-intensive businesses in the world,” even though he mostly talks about Proof-Of-Stake networks.

Anyway, let’s start at the beginning:

“In 2012, however, the government of Puerto Rico, which is an unincorporated territory of the United States, passed a series of laws offering tax incentives to any American investor who wishes to relocate.”

This resolution caused two phenomena. First, “heavyweight crypto players such as hedge fund Pantera and risk management firm Darma Capital have moved to Puerto Rico.” And second, “some locals are angry that they don’t get the same tax breaks, and the influx of wealthy foreigners is pushing property prices beyond the reach of existing residents.”

Before jumping to conclusions, remember that in 2017, a storm of epic proportions hit Puerto Rico. “Hurricane Maria was the worst storm in nearly a century, bringing winds of 155 mph and causing damage estimated at $90 billion. The entire island lost access to electricity and blackouts Regular taxes are still common today. Favorable tax laws are one way to bring money to the island. And it seems to work.

What’s going on in Puerto Rico?

The author is torn. On the one hand, he seems to admire crypto’s attitude to life. On the other hand, he still believes that everything is magic money on the internet and doing it in crypto is effortless.

“In the real world, “pessimism is rampant and we seem to be fighting for smaller and smaller slices of the pie. What if you could just make the cake bigger? What if you could just use technology to create new wealth in an instant? »

On the one hand, the author sees the good: “For the past few months, Puerto Rico has been hosting cryptocurrency conferences and setting up beginner courses for locals to learn the basics of digital currencies.” On the other, he describes the side of the naysayers with fierce prose: “Migrants are rootless digital plutocrats – greedy neocolonial tax exiles who act out a fantasy by feasting on the desperation of Puerto Rico.”

Puerto Rico is his dream: Evan Arteaga

Among those interviewed is “Evan Arteaga, 38, who has lived in Puerto Rico for four years.” He is extremely enthusiastic about the crypto industry: “It is the inevitable evolution of the capital market. I think that’s the future, we just have to keep going. And he also appreciates everything Puerto Rico has to offer.

“Taxation is the incentive to be here, let’s be honest,” Arteaga says. “You save 40% in capital gains tax. But it’s also a beautiful place. We have the beach. We have the mountains. This is my dream.”

Decentralize everything: Amanda Cassatt

Another expat featured in the article, “Cassatt, 31, is the founder of Serotonin, one of the first marketing companies dedicated to working with crypto companies.” His quote is weird:

“Decentralize everything. Currency is just the beginning. Decentralize energy markets. This is the embryonic stage of a new economy.

What does “decentralize energy markets” mean? The author of the article tries to explain it further, “energy, for example, could be exchanged between individuals on the blockchain instead of going through the central network. Goodbye energy giants. WHAT? This is certainly not the case. And not everything needs to be decentralized or require a blockchain. The energy giants have nothing to fear.

Review: Ana Teresa Toro

For an opposing view, the article brings in a “local writer and teacher”. Ana Teresa Toro says:

“They’re here dreaming of a utopia because they have so much money in their pockets, while people here can’t even dream of next week. It’s like a playground for them, the stakes are so low. It’s as if they were rehearsing a play in our living room.

And later, “the disparity is just brutal. I still have power outages once a week. She could talk about the world in general. It’s not ideal, it’s not pretty, but that’s the world we live in.

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The self-proclaimed savior of Puerto Rico: Brock Pierce

Controversial Brock Pierce took a break from impersonate a bitcoin leader play the role of insufferable leader of this particular movement. “The stars are aligned for a prosperous and brighter future for Puerto Rico. Most countries and cities need to invest heavily to get the intellectual capital that exists in Puerto Rico. This is the intellectual capital of the financial future,” he said in the article.

It seems that Pierce didn’t make a good impression on the author, however:

“Some find him increasingly insufferable, resent his role as the self-proclaimed ‘face’ of their movement, and wonder how much of the billion dollars he has pledged to donate to the island and related causes s materialized. “I’m a positive member of society, but I don’t shout it everywhere,” says Andrew Keys, a crypto whale who emigrated to the island several years ago. was going to give a billion dollars to Puerto Rico. We hardly saw any of this.

breakthrough answer? “I’ve invested more than anyone I know. I don’t know anyone on Earth who has made that kind of commitment. But you realize how difficult it is to give money.

The local story of FeelGood: Julio Domenech

The 24-year-old “was working as a business card collector in bars for an IT company” when he came across cryptocurrencies.

“Now he’s a ‘millionaire’ and just got back from a crypto conference in Dubai. “It’s honestly like a dream,” Domenech says. “Crypto has completely changed my life. We’re empowered, man. Residents are getting involved too. »

And that’s Puerto Rico’s story in a nutshell.

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