Open Letter to the President of the Republic of Marshall Islands


President of the Republic of the Marshall Islands

Hilda C. Heine

c/o Minister-in-Assistance to the President
Office of the President

Regarding: The global cybercrime hub Marshall Islands and the recent launch of SOV as legal tender

Your Excellency,

Dear Ms President,

I would like to express my deepest respect for your country, your office and your person and to introduce us briefly. FinTelegram is an investigative medium focused on cybercrime and investor protection. EFRI is an initiative representing several hundreds of defrauded retail investors worldwide. As such, we more and more encounter considerable issues with the approach of Marshall Islands to handle investor protection concerns.

The Republic of the Marshall Islands (RMI) is told to be proud of being a sovereign state and a United Nations member state. Being part of the international community, however, entails a responsibility which goes beyond the interest of the single nation.

Blockchain is indeed a great vision

Despite fierce criticism from the International Monetary Fund, its partner the USA and other experts, your nation decided to become the first sovereign nation to introduce a cryptocurrency as its legal currency. While the advantages of the blockchain concept, in general, are obvious – publicly accessible data and an unchangeable general ledger – the downsides are also evident. Cryptocurrencies across all the different blockchains are prone to be used for fraudulent activities and money laundering. Consequently, cryptocurrencies are the preferred means of payment for scammers, spammers, and online fraudsters

The blockchain vision embodies the ideal of a post-offshore world as perfectly described in the Panama Papers. I am sure you know that about the current economic inequality: just 1% of the global population owns more assets than the remaining 99%. This rich part of the global society evades tax and other legal restriction with the help of tax havens and offshore destinations. Blockchains were meant to provide techno-organizational means such as public and immutable ledger for improved transparency. The latter is a conditio sine qua non for ensuring fair taxation and a fairer distribution of wealth.

RMI is a cybercrime hub

Unfortunately, your country is currently home to thousands of scammers and online fraudsters. Over the past few years, RMI has earned a reputation as the global cybercrime hub. An estimated 7 out of 10 online broker scams have registered their holding company in the RMI. Your country and your authorities offer zero transparency in this respect. RMI’s commercial register is a big black hole. The lawyers and trustees involved in this RMI offshoring avalanche are in no way inferior to the infamous Mossack Fonseca law firm of the Panama Papers. Enforcement agencies in numerous jurisdictions are currently investigating scams registered on RMI. Your country has undoubtedly built the worst possible reputation in the digital world in general and in the blockchain scene in particular. These are the facts and these are beyond any reasonable doubt.

I am convinced that you as the President of RMI you were not aware of this critical situation when you promoted the introduction of the SOV as legal tender. According to the information available to us, the SOV will run on a sort of private blockchain controlled by the SOV Development Fund as its central authority (i.e. central bank). A private blockchain, however, also means that there will be no transparency provided to other market participants, the general public and authorities. That said, it should be evident that your SOV does not only contradict the central idea of blockchains. Worse than that.

Given the fact that RMI already is a leading global cybercrime hub, the introduction of a private cryptocurrency could become a disaster for millions of online investors. Your country runs the risk of actually establishing itself as a future cybercrime hub responsible for setting up the scene for the ripping off of millions of retail investors and victims worldwide. As a member of the international community, RMI must take precautions not to be an economic and financial threat to other states and their citizens. Otherwise, RMI must take responsibility.

Join the fight against cybercrime

On behalf of thousands of injured people, we would respectfully ask you to make this dangerous development in RMI the subject of public debate in your Parliament. In addition, it would be high time to take appropriate measures to prevent damage to the reputation of your country as the home of cybercrime activists.

In the medium and long term, these developments will do more harm than good to RMI and its citizens. Please don’t let that happen.

In the future, we will regularly inform you about new RMI scams and give you the opportunity to take appropriate countermeasures.


Team FinTelegram and EFRI