Puertopia: Building a crypto utopia in Puerto Rico where money is virtual

They call what they are building Puertopia. But then someone told them, apparently in all seriousness, that it translates to “eternal boy playground” in Latin. So they are changing the name: They will call it Sol.
 
Dozens of entrepreneurs, made newly wealthy by blockchain and cryptocurrencies, are heading en masse to Puerto Rico this winter. They are selling their homes and cars in California and establishing residency on the Caribbean island in hopes of avoiding what they see as onerous state and federal taxes on their growing fortunes, some of which now reach into the billions of dollars.
 

And these men — because they are almost exclusively men — have a plan for what to do with the wealth: They want to build a crypto utopia, a new city where the money is virtual and the contracts are all public, to show the rest of the world what a crypto future could look like. Blockchain, a digital ledger that forms the basis of virtual currencies, has the potential to reinvent society — and the Puertopians want to prove it.
 

For more than a year, the entrepreneurs had been searching for the best location. After Hurricane Maria decimated Puerto Rico’s infrastructure in September and the price of cryptocurrencies began to soar, they saw an opportunity and felt a sense of urgency.

 
So this crypto community flocked here to create its paradise. Now the investors are spending their days hunting for property where they could have their own airports and docks. They are taking over hotels and a museum in the capital’s historic section, called Old San Juan. They say they are close to getting the local government to allow them to have the first cryptocurrency bank.
 
“What’s happened here is a perfect storm,” said Halsey Minor, the founder of the news site CNET, who is moving his new blockchain company — called Videocoin — from the Cayman Islands to Puerto Rico this winter. Referring to Hurricane Maria and the investment interest that has followed, he added, “While it was really bad for the people of Puerto Rico, in the long term it’s a godsend if people look past that.”

 
Puerto Rico offers an unparalleled tax incentive: no federal personal income taxes, no capital gains tax and favourable business taxes — all without having to renounce your American citizenship. For now, the local government seems receptive toward the crypto utopians; the governor will speak at their blockchain summit conference, called Puerto Crypto, in March.
 
The territory’s go-to blockchain tax lawyer is Giovanni Mendez, 30. He expected the tax expatriates to disappear after Hurricane Maria, but the population has instead boomed.
 
“It’s increased monumentally,” said Mendez, who has about two dozen crypto clients. “And they all came together.”

 
The movement is alarming an earlier generation of Puerto Rico tax expats like the hedge fund manager Robb Rill, who runs a social group for those taking advantage of the tax incentives.
 
“They call me up saying they’re going to buy 250,000 acres so they can incorporate their own city, literally start a city in Puerto Rico to have their own crypto world,” said Rill, who moved to the island in 2013. “I can’t engage in that.”
 
The newcomers are still debating the exact shape that Puertopia should take. Some think they need to make a city; others think it’s enough to move into Old San Juan. Puertopians said, however, that they hoped to move very fast.

 
“You’ve never seen an industry catalyse a place like you’re going to see here,” Minor said.
 
Until the Puertopians find land, they have descended on the Monastery, a 20,000-square-foot hotel they rented as their base and that was largely unscathed by the hurricane.