Since the inception of cryptos, Peter Schiff has always criticised the nascent industry especially gold. Many wonder, ‘Does an extortion attempt from Russian hackers explain Schiff’s hatred for Bitcoin?’
Today, the millionaire broker and a noted bitcoin skeptic awoke to the news that his bank was facing renewed scrutiny as a result of an international criminal investigation.
According to reporting from The New York Times and Australian newspaper The Age, the J5; a joint task force of tax authorities from several major Western governments met after the bombshell publication of the Panama Papers. They have put ‘hundreds’ of accounts at Schiff’s Puerto Rico-based Euro Pacific Bank under keen investigations for tax evasion and other financial crimes.
That report detail what seems to be a comically inept organization that is responsible for harboring the fortunes of a cast of criminals and shady businessmen. Staff hired after a quick Google search screening was charged with attracting clients like Simon Antequetil, the noted Australian fraudster who is also a tax avoidance maestro.
These reports also shed some light on how Euro Pacific may have tainted public holdings of Schiff’s favorite asset: gold. John Chevis, a former Australian Federal Police (AFP) investigator, found out in 2017 that West Australian government-owned Perth Mint had some connections with Euro Pacific. Chevis told The Age:
“I was very surprised. I think there’s a significant risk that some of the gold held within the Perth Mint by customers of the Euro Pacific Bank may be held beneficially for criminals in other parts of the world.”
Schiff Says He Is Innocent
While speaking to The Age in September, Schiff insisted that he did nothing wrong on the part of the Euro Pacific. He said:
“The bank turns down far more accounts than we approve because our compliance is so rigorous. It’s got nothing to do with reality.”
Later, he stormed out of the interview. However, hidden amid these reports is a critical detail that may shed some light on why Schiff has been quite a major critic of bitcoin. From The Age:
“The bank’s security was also a problem […] at one point, Russians tried to extort the bank for a ransom of 1000 bitcoins, worth millions of dollars.”
Schiff was criticizing Bitcoin as early as 2013. But, the attempted extortion scheme may explain why he has been mainly vocal lately, most notably in a Twitter duel with Gemini co-founder Tyler Winklevoss.
The gold bug also demonstrated a history of paranoia about hacks, particularly crypto-related hacks. Last July, Schiff said that the hack of multiple Twitter accounts by an American teenager might be a major “harbinger” for a Bitcoin hack. Earlier in April, he tweeted about:
“the potential for improvements in technology to hack the blockchain and counterfeit Bitcoin.”
Despite Schiff’s worries about the possible hacking of the Bitcoin blockchain, there is no equivalent in the digital asset space to iron pyrite. Unless we consider BSV.