Why Facebook whistleblower and her ‘crypto friends’ moved to Puerto Rico

6 months ago 102

When Facebook whistleblower Frances Haugen isn’t flying astir the satellite urging lawmakers to modulate her ex-employer, she’s seemingly surviving disconnected little-taxed cryptocurrency profits successful her caller location of Puerto Rico.

“For the foreseeable future, I’m fine, due to the fact that I did bargain crypto astatine the close time,” Haugen said successful an interview with the New York Times published Sunday erstwhile asked however she’s supported herself since leaving Facebook.

Her determination to Puerto Rico successful March was motivated by a tendency to articulation her “crypto friends” connected the island, arsenic good arsenic a wellness condition, Haugen added. 

Puerto Rico — a US territory known for its beaches, rainforests and Spanish Colonial architecture — has go a hub for cryptocurrency investors similar Haugen successful caller years acknowledgment mostly to its presumption arsenic a taxation haven. 

Under a instrumentality called Act 22, radical who unrecorded successful Puerto Rico for astatine slightest fractional of the twelvemonth are exempt from taxes connected interest, dividends and superior gains — meaning they tin currency successful connected net from crypto and different investments without forking implicit wealth to Uncle Sam. 

San JuanPuerto Rico has beauteous architecture — and escaped taxation laws.Getty Images/iStockphoto

In a bid to instrumentality vantage of the escaped taxation laws, apical crypto firms including the hedge money Pantera Capital and NFT marketplace SuperRare person ditched New York and Silicon Valley for Puerto Rico successful caller years. 

Other crypto investors, flush with currency amid the crypto boom, person utilized their little-taxed profits to buy up spot successful San Juan with a imaginativeness to physique a caller nine called “Puertopia.” 

YouTube prima and crypto capitalist Logan Paul besides moved to the state earlier this twelvemonth and has been renting a mansion for astir $55,000 per month — a determination that Paul admitted was chiefly motivated by the country’s taxation policies.

Frances HaugenFrances Haugen has said that she moved to Puerto Rico successful March 2021. Getty Images
Puerto Rico beachesTop crypto firms including the hedge money Pantera Capital and NFT marketplace SuperRare person ditched New York and Silicon Valley for Puerto Rico successful caller years. Getty Images

“In Puerto Rico you’re motivated to bash much and marque much wealth due to the fact that of the implications that travel with it,” said Paul, according to Time.

The territory’s lax taxation laws person besides drawn involvement from much accepted financiers — including legendary hedge money manager John Paulson, who mulled moving to the land for taxation reasons successful 2013, Bloomberg reported. 

While supporters of Puerto Rico’s taxation breaks reason that they bring much-needed concern to an land that lags down the mainland US successful economical development, critics person slammed outsiders for driving up lodging prices successful what they telephone a modern time signifier of colonialism

Puerto Rico beachPuerto Rico’s beaches and taxation laws person drawn investors. Getty Images
Puerto RicoCritics person slammed outsiders for driving up lodging prices successful what they telephone a modern time signifier of colonialism.Christopher Sadowski

For Haugen’s part, she gave small item connected her crypto investments and friends successful the New York Times interrogation — and it’s unclear if she volition suffice this twelvemonth for Puerto Rico’s taxation exemptions nether Act 22, which was passed successful 2012 arsenic “The Individual Investors Act.”

The instrumentality stipulates that investors similar Haugen indispensable unrecorded successful Puerto Rico for 183 days retired of the twelvemonth successful bid to suffice for the exemption. They’re besides encouraged to amusement different grounds of section residency by obtaining section slope accounts, drivers licenses and elector registrations.

Since Haugen moved to Puerto Rico successful March and has since flown to Washington, D.C. and London to conscionable with lawmakers and attest astir Facebook, she whitethorn not rack up capable days connected the land to prime for the exemption. 

Frances Haugen testifying successful  the SenateHaugen moved to Puerto Rico successful March and has since flown to Washington, D.C. and London to conscionable with lawmakers and attest astir Facebook.Jabin Botsford – Pool via CNP /
San JuanIt’s unclear if Haugen volition rack up capable days successful Puerto Rico to suffice for the taxation exemption.Getty Images/iStockphoto

Bill Burton, a erstwhile Obama medication property caput who is helping Haugen with media relations, did not instantly respond to calls seeking comment.