Honduran city told to 'leave' after crypto-friendly legislation repealed.

Próspera's leadership has responded to reports that it is facing opposition from the residents of Crawfish Rock, a neighboring community, over its expansion plans.

The Guardian reported in a July 5 article that the special economic zone, which was supposed to be an island paradise with low taxes and crypto-friendly regulation, has faced resistance from some residents of the Crawfish Rock community.

Próspera's plans to expand its headquarters are said to be causing some residents concern that they will lose their homes, with the article describing the project's headquarters as sitting "in a landscape marked by bulldozers and deep holes dug for the foundation of the next phase of construction."

It’s another attack on the Bitcoin-loving city, which has been embroiled in a dispute with the Honduran government since it repealed a Zones for Employment and Economic Development (ZEDEs) legislation in April, which was an important piece of law that would have allowed it to function as an independent self-governed zone.

On July 6, Próspera and Nick Dranias, the general counsel of the company, published an article and a lengthy Twitter thread that claimed that articles like The Guardian's were just another example of "the mainstream media's barrage of lies and misinformation."

“Unsurprisingly, given the impactful nature of our project, we have been confronted with a barrage of lies and misinformation from the mainstream media.”

Drani explains three widespread misconceptions that he claims are being spread by the mainstream media, including:

Próspera failed to inform the community about the project before it was released.

Próspera is not an ideological project.

Próspera ZEDE, a project in Honduras, was accused of taking land from locals.

A spokesperson for Próspera told Cointelegraph that in general, the community's response has been positive, with a few exceptions:

“We have a fantastic relationship with the local community, are the largest employer of the community, and generally work well with them. In fact, only two members of the community dislike us — the media just always speaks to only those two individuals.”

Próspera Global also claims on Twitter that the areas marked for construction are environmentally friendly "low-cost housing" available to all islanders, with the building jobs serving as a source of employment for the local community.

Since President Castro repealed the ZEDE law in April, Próspera has been locked in a legal standoff with the government. The repeal would give the project 12 months to register under a different framework, such as a "Free Zone", which would offer tax cuts but not allow self governance.

In June, Próspera submitted a request for government consultations under the Investment Chapter of the Dominican Republic–Central America–United States Free Trade Agreement (CAFTA-DR), in an attempt to maintain its ZEDE status under the terms of the original agreement.

Honduras Próspera Inc. has insisted that its registration as a ZEDE is valid for at least another 50 years because of the legal framework of the agreement it signed with the government in 2017. In a June 4 blog post, the company noted that:

“A failure to uphold these commitments would constitute a breach of international and Honduran law, as well as wrongful and unfair treatment of Honduras Próspera. Moreover, it would send a message to the world that no foreign investment in Honduras is secure.”

The company said it was trying to avoid a “global investor-state arbitration” and that the government should honor its initial agreement with the ZEDE. It plans to "invest hundreds of millions more in the future," and back in April, Honduras Próspera Inc. raised $60 million to invest in the project despite its repeal.

The spokesperson said that the government had “not yet formally responded to our request for official consultation."

Honduras Próspera Inc. manages the privately-owned Próspera Village in Honduras. The initial size of the ZEDE territory is 58 acres, which contains areas for its headquarters, housing, and areas for businesses to set up shop. The ZEDE territory can grow over time if landowners agree to integrate their properties into it.