Five months after Hurricane Maria, Puerto Rico is still struggling to rebound. As an unincorporated territory of the United States, the small island was sidelined when it came to restoration efforts. The U.S. Army Corps of Engineers estimates that over 10 percent of the island’s residents are still without power, though Carmen Yulin Cruz, Mayor of San Juan puts that number closer to 30 percent.
Electricity isn’t the only concern for Puerto Ricans. Over 400,000 residents are still using blue tarps as roofs on their homes as they wait for federal assistance.
Cruz noted: "The US government response has been inadequate, has been inefficient, and has been inappropriate.”
But this tragedy has turned into opportunity for some.
A growing group of self-proclaimed “Puertopians” are flocking to Puerto Rico to set up a crypto-paradise. Because of its unincorporated status, the island has acted as a tax haven – and playground – for the super-rich for decades, and the new generation of crypto-millionaires is proving to be no exception.
The goal is to build an entirely new city where cryptocurrencies and blockchain tech are the foundation. The group has even been scouting the island for prospects, searching for a location where they will be able to build an airport and docks.
In the meantime, however, the Puertopians are occupying Old San Juan, eating at nice restaurants and living in upscale hotels in the heart of the colonial section of the city.
But taking a closer look at the man in front of the curtain, things get weird. Fast.
“Sol” and its Creator
The project, first nicknamed “Puertopia,” quickly changed to “Sol” after a Latin translation revealed the original name meant “boy paradise,” is headed by an extremely controversial, wealthy, and eccentric individual with a more-than-murky past.
Brock Pierce has become somewhat of a polarized figure in the crypto-space. As director of the Bitcoin Foundation, he has argued the vast benefits of crypto-philanthropy, even suggesting that he would be giving away $1-billion of his personal funds to charity, but his unsavory rap sheet leaves a lot more than questions that need answering.
Pierce, a former child actor, joined the world of digital business at 18 as the executive vice-president of Digital Entertainment Network, which later came under fire through accusations of a massive child sex scandal featured in “An Open Secret,” directed by Amy Berg.
The scandal first came to light in 2000, when employees and child actors alleged that Pierce and his partners, Chad Shackley and Marc Collins-Rector, were running a child abuse ring with several A-List actors, including many who were tied financially to the network. The notorious parties allegedly featured drugs, alcohol, and even forced intercourse at gunpoint.
Following the claims, Pierce and his counterparts resigned from Digital Entertainment Network and fled to Spain. It was later revealed that Pierce settled out of court with accuser Michael Egan, for a sum of $21,600USD.
While in Spain, Pierce formed IGE (Internet Gaming Entertaining), which acts as a broker-of-sorts for various in-game currencies, including Blizzard favorites World of Warcraft and Diablo 3. After several profitable years, and a noteworthy $60-million investment from Goldman Sachs, the company fell into a slump. In January 2007, the company was losing a reported $500,000 per month, and Pierce was ultimately replaced as CEO by none other than President Trump’s Ex-Right-Hand-Man, Steve Bannon.
Following several years of serial capitalism and philanthropic work, including donations to the Clinton Foundation, Pierce jumped into bitcoin headlines, founding the VC giant Blockchain Capital with Bart Stephens and Bradford Stephens in 2013. (Pierce has since been removed from the company’s webpage)
His early-adopter status, numerous connections, and tremendous wealth then propelled him to the position of Chairman of the Board of the Bitcoin Foundation a year later, resulting in the resignation of 10 key members, including Andreas Antonopoulis, citing lack of transparency.
Since, Pierce has participated in numerous ICOs and crypto-ventures, including the wildly controversial Tether, which is supposedly a currency ‘tethered’ to the USD and closely connected to the world’s largest bitcoin exchange by volume, Bitfinex. While Tether refutes claims that the cryptocurrency is not, in fact, fully backed by USD reserves, a 2017 report from Nathanial Popper claims otherwise.
Back to Puerto Rico
For the sake of rebuilding this article after a wild tangent through one of crypto’s most fascinating characters, let’s take a quote from Pierce himself:
When you have to start over from scratch, you can do it very differently than if you have this big thing that’s kinda been building on top of itself for ages and ages. So in this horrible event that’s occurred, there will be a great opportunity that emerges and I wanna be a part of helping the Puerto Rican people.
Indeed, other members are enthusiastic about the opportunity to help, as well.
Hasley Minor, founder of CNET and fellow Puertopian noted: “While it was really bad for the people of Puerto Rico, in the long term it’s a godsend if people look past that.”
The intentions, at first glance, may seem genuine, but the story itself, and the people involved, tell a completely different story. So far, it seems less money has actually been spent on rebuilding the island than it has been on avoiding taxes and sipping rum.
Another participant in the ‘techodus,’ and Pierce’s partner at Tether, Reeve Collins, made no secret of his anti-tax position, explaining:
No, I don’t want to pay taxes... This is the first time in human history anyone other than kings or governments or gods can create their own money.
So, with tech majors and crypto-millionaires descending on Old San Juan what are Puerto Ricans thinking?
Andria Satz, Old San Juan resident and employee of the Conservation Trust of Puerto Rico explains an ongoing trend on the island:
We’re the tax playground for the rich. We’re the test case for anyone who wants to experiment. Outsiders get tax exemptions, and locals can’t get permits.
And that’s exactly what has happened for years. Puerto Ricans have been excluded from participating in the gold rush while the mega-rich have exploited the island, its resources, and its people.
It’s clear there is a stark contrast between lavish lifestyles enjoyed by crypto-expats and the ongoing struggles of the citizens of Puerto Rico. And it raises an important question: is this just another case of the super-rich participating in disaster capitalism, re-colonizing a territory which has fallen victim to the same scheme from the ultra-rich time and time again? Or is this pseudo dream-team of tech heroes really going to save the day this time? My vote is definitely not on the latter, but I hope they prove me wrong.
Featured image from Shutterstock