The development of a banking sector in Puerto Rico focused on cryptocurrencies and digital assets advances through actions of its regulator, the Office of the Commissioner of Financial Institutions (OCIF), both to limit the actions of some institutions and in the granting of licenses to new entities.
On the one hand, Superior Judge Anthony Cuevas Ramos recently decided that he would not intervene with a proceeding in which OCIF issued a cease and desist order against Athena Bitcoin, Inc., a company that operates digital currency ATMs on the island. , such as Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The regulator applied a circular letter from the Money Services Businesses, or MSB in English, and refused to issue Athena a license on the grounds that it did not meet the requirements of the circular letter. OCIF also alluded to the fact that the Department of Justice had information of that one of the ATMs had been used for illicit transactions, which, so far, has not led to criminal charges for anyone.
The judge ruled that Athena had to exhaust the administrative remedies in the OCIF before requesting the court’s intervention and denied the request for an injunction and declaratory sentence. “The area of financial institutions is a highly specialized and regulated area, for which the expertise of the administrative agency in charge of such matters is extremely important. For all of the above, we must conclude that this case was presented at the wrong time and without culminate the administrative procedure that was underway,” concluded the judge.
On the other hand, in an announcement made to the financial market, the international financial entity (IFE) FV Bank International, Inc. became the first bank on the island to launch products for depositing, transferring and dealing with digital currencies, starting with the Ether, USDC, and USDT currencies. FV Bank has been licensed to operate in Puerto Rico since 2020 and was founded in 2018 by Miles Paschini and Nitin Agarwal.
In addition to being the first in Puerto Rico, with this move FV also becomes one of the few banks fully regulated under the laws of the United States that offers these services.
In a report for The Spokesman Review (Washington), Paschini said that FV focuses on institutional clients that are divided into 20% US and 80% foreign. Due to the legal structure of the EFIs, they cannot do business with clients residing in Puerto Rico, so investors who move to the island under the incentives of Law 60 would not have their digital assets in PV.
In the same report, the OCIF commissioner, Natalia Zequeira Diaz, said that her office has issued several preliminary licenses for banks that handle cryptocurrencies but, until now, only FV had completed all the requirements and developed a compliance department.
