Authorities shut down well-known cryptocurrency critic's bank for breaking the law

Peter Schiff's Euro Pacific Bank cryptocurrency critique has been shut down

Puerto Rico's Office of the Commissioner of Financial Institutions on Thursday ordered San Juan-based Euro Pacific Bank, a bank founded in 2017 by financial analyst Peter Schiff, to cease operations due to a lack of capital and inadequate compliance controls.

Schiff wrote on Twitter, that the allegations are without any basis in truth

Despite no evidence of wrongdoing, Puerto Rico regulators shut down my bank for net equity issues rather than allow a sale to a highly qualified buyer promising to put up capital well in excess of regulatory minimums. As a result, accounts are frozen and customers may lose money.

The decision by the Puerto Rican authorities follows a long investigation launched two years ago by the J5 international group of tax authorities into alleged tax evasion and money laundering of dubious origin.

The Joint Chiefs of Global Tax Enforcement (J5) is made up of the tax authorities of the United States, Australia, the Netherlands, Canada and Britain, which was created specifically for the international fight against tax evasion and money laundering.

The head of the investigation, Natalia Zequeira Díaz, said in a note:

"Euro Pacific has a long history of non-compliance".

According to the sheet New York Times, which first reported the investigation, Peter Schiff was reportedly interviewed by investigators and denied any allegations.

Operation Atlantis: a protracted investigation into the activities of Euro Pacific Bank

The Euro Pacific investigation, known as Operation Atlantis, was one of the first major investigations by a multi-jurisdictional task force coordinated by the Australian and US tax authorities.

The bank, after opening about 15,000 accounts in its first two years of operation, was hit hard by the news of the opening of the investigation, as Schiff himself stated:

„Ztratili jsme spoustu zákazníků, protože se lidé báli.“

He later added that while he doesn't have much understanding of anti-money laundering rules, he respects them.

In 2019, the bank reportedly reported a net loss of nearly $751,000 and a total accumulated loss of nearly $4 million. According to the report, the bank had negative equity of $1.3 million at the end of 2020 and reported a net loss of nearly $550,000 in the first quarter of 2022.

However, according to financial authority sources, the bank is likely to be placed into liquidation on July 7, although Schiff has already announced that he will appeal the decision to the Court of Appeal.