Puerto Rico shuts down Schiff's bank for falling short on net minimum capital requirements, leaving customers without access
At the behest of Puerto Rico regulators, Schiff's bank was shut down for falling short on the net minimum capital requirements. As a result, customers lost access to their accounts once a freeze was put into place by authorities.
Economist Peter Schiff, who is well-known in the community for his anti-crypto views, had his bank closed by Puerto Rico regulators. The revelation, however, led to Crypto Twitter pointing out the "irony" as Schiff's prediction for Bitcoin (BTC) came true for his traditional bank.
The banking regulators in Puerto Rico shut down Schiff's bank for not meeting the minimum capital requirements, which affected the customers further as they lost access to their accounts after a freeze.
Despite no evidence of crimes, Puerto Rico regulators closed my bank anyway for net capital issues, rather than allow a sale to a highly qualified buyer promising to inject capital far in excess of regulatory minimums. As a result accounts are frozen and customers may lose money.— Peter Schiff (@PeterSchiff) July 3, 2022
Schiff acknowledged that "customers may lose money," but said that he was unaware of the regulatory minimums and was not given any legal notice prior to the abrupt closure.
“It costs a fortune to run a small bank. That's why I never really made any money. The compliance costs are outrageous.”
Bitcoin's role in the (finance) industry was highlighted when the crypto community explained how it could reinvent the core of traditional finance.
The irony of this is so hilarious!@PeterSchiff you do realize that if you had been using Bitcoin this would not have been possible!— Coach K (30% Crypto, 70% USDC) (@Coachkcrypto) July 4, 2022
You should be loving decentralization https://t.co/cDCOWdMowL
Bitcoin podcaster Stephan Livera also commented on the development, saying, "He's (Schiff) been a #bitcoin skeptic since $17.50 (it's currently $19,100).” The sudden closure of Schiff’s bank in Puerto Rico reignited the discussions around Bitcoin’s resistance to judicial supremacy.
"This is priceless," said @HodlMagoo while others helped Schiff look for an alternative to traditional finance, asking "Do you understand why you need bitcoin now?"
The government of Puerto Rico has been accepting of crypto in the area. On April 20, the government became the fourth jurisdiction in America to grant a money transmitter license to Binance.US, a United States-based subsidiary of crypto exchange Binance.
Bitcoin is increasingly seen as the replacement for traditional finance, following the bank’s losses and Schiff’s rant.
Deutsche Bank analysts expect Bitcoin prices to rise back to $28,000 by the end of the year despite a bear market.
Analysts Marion Laboure and Galina Pozdnyakova predicted that the Standard and Poor (S&P) would return to its January levels, which in turn could lead to a 30% increase in Bitcoin’s value by mid-2022 — bringing up its price to the $28,000 mark.