Peter Schiff – CEO of Euro Pacific Capital and a popular financial commentator – had his bank frozen by Puerto Rico’s regulators. The anti-crypto economist was mocked fiercely by Bitcoiners shortly afterward, but he failed to understand why.
Closed Without Warning
On Sunday, Schiff tweeted that his bank was closed due to net capital issues “despite no evidence of crimes.” The situation has left customers’ accounts frozen, meaning they may lose their money.
The “crimes” in question refer to media allegations that his bank had engaged in tax evasion and money laundering. The commentator claims that such “bad press” had crippled his institution financially.
He also claims to have been barred from letting a qualified buyer inject more capital into the bank, leaving him with no recourse. Apparently, regulators objected to the deal because it would let Schiff own 4% of the purchasing company.
“They never let me know they objected,” he added. “I found out in C&D order to shut down the bank. Had they ever told the 4% stake was a problem I would have restructured the deal.”
Karma for Peter Schiff?
Bitcoiners were quick to mock Schiff in the reply section. “If only there was a way to transfer wealth without trusted third parties,” tweeted Alex McShane – Head of MultiMedia at Bitcoin Magazine.
Swan Editor-in-Chief Tomer Strolight tried to nudge Schiff in the same direction. “Looks like you need a censorship-resistant and permissionless way to store your money in the future,” he said.
Others like Erik Voorhees took to their main feeds to mock the gold bug:
The visionary person naturally perceives value in #Bitcoin when realizing that anyone’s bank account can be shut down.
The adaptive person begrudgingly perceives value in #Bitcoin when his own bank account is shut down.
And then there’s @PeterSchiff
— Erik Voorhees (@ErikVoorhees) July 4, 2022
The fervent Bitcoin maximalist Max Keiser had the most scathing words of all for Schiff. He mocked the economist for not buying Bitcoin on a recommendation back in 2013, and added that he’s a “duplicitous charlatan.”
Schiff has argued for years that Bitcoin will eventually collapse to zero, maintaining that the asset holds no “intrinsic value.”
However, Bitcoin is known for being able to allow value storage and transfer without permission from centralized parties. This theoretically gives holders more control of their money, without the threat of seizure by banks or governments. For example, when Canadian authorities shut down donations to the Freedom Convoy protest in February, they had trouble seizing its Bitcoin funds.
Despite the circumstances, however, Schiff is still not convinced of Bitcoin’s value. In fact, he didn’t see much connection between Bitcoin and his bank issues at all.
“What does Bitcoin have to do with it?”, he asked, when told the closure was his “punishment” for “yelling” about Bitcoin.
Interestingly, Peter Schiff’s son is extremely enthusiastic about Bitcoin, much to his father’s dismay. Spencer Schiff called the recent situation “stupid,” and also doubts that his father has bought any Bitcoin thus far.