Tue. Nov 19th, 2019

Crypto firm not backed by gov’t

Representational image

President Tommy Remengesau Jr. said there is no truth to the claim that an online cryptocurrency firm, which popped up days before the visit of Taiwan President Tsai Ing-wen, is a government-backed venture.

The company called the Palau Coin described itself as a “blockchain technology-based decentralized digital currency of the Palau Tourism Environmental Protection Fund led by the government of the Republic of Palau.”

The website also appears to favor Palau’s relationship to China, adding that the company “become the biggest beneficiary of the establishment of diplomatic relations between China and Palau.”

Remengesau told reporters that the public should be wary of such claims being spread through websites that use false data attributed to the government.

“Only the Marshall Islands has made a legislation to allow cryptocurrency in their transaction, Palau has not. Officially, Palau does not involve in any cryptocurrency,” he said.

The firm also said its own leases of lands in Palau and claimed Speaker Sabino Anastacio is an advisor for PalauCoin.  It said investors can obtain PalauCoin through subscription, and the PLC Foundation will use the funds raised to purchase land assets.

It claimed that because Palau’s tourism is booming, the land value will also increase. It also claimed that investors to the company will be allowed by the government “the privilege to purchase land at $20 per square meter.”

Under the law, a foreign entity can’t own land in Palau but they are allowed to lease it up to 99 years.

Legal Counsel and Interim Executive Director Cameron Van Tassel in an interview yesterday said the Foreign Investment Board (FIB) has not received any application from PalauCoin but the matter has been brought up to the agency’s attention.

However,he said it is challenging for Palau to put a stop to this kind of scheme.

“It is difficult for us to regulate them if they don’t have physical presence in Palau,” Van Tassel said.

Asked if he considers PalauCoin a scam, Van Tassel said he does not know enough information to make such an assumption but he said PalauCoin website contains information that he would describe as “deeply misleading.”

“It seems to suggest the currency is supported, or issued by Palau which I do not believe to be true and it described a land holding operation that I have no evidence of, unless that land is held entirely by local investors, that whole project is in violation of foreign investment act and subject to civil and criminal penalties.”

Palau is one of the many nations that do not have the mechanism or law in place to regulate cryptocurrency.

While cryptocurrency is welcomed in various countries, several countries, especially small nations like Palau are cautious because of its perceived links to illicit activities such as money laundering and drug trafficking. (Bernadette H. Carreon)