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Compiled by: Luffy, Foresight News
On sunny days in 2022, cryptocurrency entrepreneur Brock Pierce enjoyed taking friends on a boat trip to Vieques, about 75 miles from his home in Puerto Rico. Pierce wanted to show off one of his “favorite” properties of his life: a once-glamorous beachfront resort that he’d bought for more than $15 million.
In its heyday, the resort was a W Hotel with a 6,000-square-foot spa, a restaurant run by a Michelin-starred chef and sweeping ocean views, and it was a mainstay of Vieques’ tourism industry. Then, in 2017, the hotel was hit by Hurricane Maria and forced to close. Pierce reopened it, using his cryptocurrency fortune to revitalize the hotel and the local economy.
Brock Pierce moved to Puerto Rico in 2017
Mr. Pierce, a former child actor who excelled at acting, would anchor his Italian-made yacht at a local port on trips to Vieques and lead guests along a beach roamed by wild horses to the doors of the shuttered W Hotel.
“This is a big personal bet for me,” Pierce said. “It’s where my heart is.”
But Pierce’s display of luxury was an illusion. Like many of the other grandiose projects he launched in Puerto Rico, the hotel is now mired in debt and legal disputes. Pierce lost the W last fall in a dispute with another investor. Now the hotel remains shuttered, its windows smashed and its floors covered in mold and horse manure. A $17,000 recliner designed by a famous Spanish architect gathers dust in the empty atrium.
Pierce's dream of reopening the W Vieques didn't come true
Chairs of various colors are stacked in the shaded lobby of the W Hotel
When Pierce moved to Puerto Rico in 2017, he had invested in a series of experimental cryptocurrency businesses. With the help of a think tank, he made a surprising promise to revitalize the local economy. Pierce, who is known for his role in the creation of USDT, one of the world's most popular digital currencies, led a wave of industry immigrants to Puerto Rico, many of whom began buying land and hyping a project they called Puertopia, wanting to transform the U.S. territory into a hub for cryptocurrency investors and technology startups.
“If you’re an American and you’re in the cryptocurrency industry, you’ve got to go to Puerto Rico at least once,” Pierce said in 2019.
Puerto Rico is a cryptocurrency haven. In 2012, the local government passed legislation to turn the archipelago into a tax haven for wealthy immigrants. Under the law, now known as Act 60, expats there can apply for a benefit that exempts them from paying capital gains taxes. The measure is intended to increase investment in Puerto Rico's economy, which has been struggling to recover from a two-decade financial crisis.
But according to hundreds of pages of court records and interviews with more than two dozen people familiar with his efforts in Puerto Rico, Pierce’s vision of a cryptocurrency-driven economic recovery has yet to materialize. His business partners betrayed him, and some colleagues say he’s running out of money. There’s no clear evidence that Pierce’s arrival helped the local economy. Instead, Bill 60 has become a symbol of a new era of exploitation.
Many locals see Pierce as the latest in a centuries-old legacy of the global elite treating Puerto Rico as their private playground. After the U.S. invasion in the late 19th century, American businessmen seized hundreds of acres of local land to build sugar plantations and funnel profits back to the U.S. Decades later, the U.S. Navy conducted military exercises on Vieques, including bomb tests that damaged the ecosystem and caused long-term health problems.
As Pierce and other wealthy immigrants have arrived, Puerto Rican residents have seen new cracks, with soaring housing prices, especially in coastal towns, forcing local families out of their homes. On a wall outside the W Hotel, a group of local artists painted a mural showing Pierce in a crimson tunic holding a Bitcoin logo with the caption: “Colonialism.”
Chameleon Instinct
On a recent Friday evening, Pierce, 43, sat down for coffee at the Convent Hotel in Old San Juan, a former Masonic lodge-turned-hotel that serves as an informal base for clandestine Puerto Rican immigrants. He wore a wide-brimmed orange hat and an oversized white T-shirt with the words “Scars Never Break.” With a dramatic gesture, he pointed out the window, toward a bustling cobblestone avenue called Cristo Street, one of the city’s oldest.
“This was one of the first pieces of colonial infrastructure built by the Spanish conquistadors,” he explained. “It was the first brick road in the entire Western Hemisphere.”
Now, the landscape belongs to Pierce: He purchased the monastery in 2018 for $4.8 million.
Pierce arrived in Puerto Rico with a unique resume: The son of a Minnesota home builder and a church official, he was a child actor who briefly appeared in the Mighty Ducks movie and starred in a movie called First Child with comedian Sinbad. As an adult, he became an early investor in several prominent cryptocurrency projects, eventually making a fortune of $700 million to $1 billion.
Aerial view of San Juan, Puerto Rico.
Pierce leads a group of investors to Puerto Rico who are committed to turning the U.S. territory into a hub for cryptocurrency investors and tech startups
After the passage of Proposition 60, tourists from the United States became a fixture in restaurants and nightclubs across Puerto Rico. Pierce, a regular at Burning Man, is one of the most easily recognizable visitors. He is often seen walking the streets of Old San Juan: short and energetic, he wears a T-shirt and leather vest, with a necklace around his neck.
Mr. Pierce bought two houses in a gated community in Dorado, a place where wealthy people live, and lived there with his partner, entrepreneur Crystal Rose, and his mother, Lynette Calabro. He mingled with local politicians and threw lavish parties where guests sometimes took drugs such as cocaine and ketamine, according to two people who attended the parties.
For a while, Pierce managed to charm some of the locals with his openness and curiosity. Like a skilled actor, he had a chameleon-like instinct to adapt his behavior to the preferences of his audience. “If it’s a serious person, he acts serious,” said Hugo de la Uz, a local maritime expert who helps manage Pierce’s yacht. “But if it’s a crazy person, he acts crazy.”
Pierce expressed an interest in nearly every world religion and had a hippie spirit. Once, while traveling with some fellow Act 60 immigrants, he snuggled up in the arms of a kapok tree, a species worshipped by some Puerto Ricans. “I felt a connection to him because he had a spiritual depth,” said Carli Muñoz, a Puerto Rican pianist who dated Pierce in San Juan.
The Kapok Park is a tourist attraction and protected area on Vieques Island. In the center of the park is the oldest Kapok tree in Puerto Rico.
But that was as far as the goodwill went. “I had made up my mind not to do business with him anymore,” Muñoz said.
Real estate records show that Muñoz has purchased at least 14 properties since moving to Puerto Rico. Some of those properties, like the convent, are already functioning businesses. But Muñoz has also announced plans to turn much of his portfolio into new projects, including an art gallery and a community center. None of those projects have come to fruition. A hospital he bought late last year in Humacao is struggling, and the gallery was recently put up for sale. In 2019, Pierce took over a three-story building in Old San Juan that once housed a children’s museum. For a while, he told local media he used it as “a place to meet with friends and discuss ideas.” Today, the building sits empty, paint peeling from its walls.
The abandoned space inside the former Children's Museum in Old San Juan, which Pierce said he bought "as a place to gather and discuss great ideas."
“It’s so sad,” said Robert Cimino, a Puerto Rican businessman who owned the building for 19 years before selling it to Pierce for $2 million. “I wanted to sell it to someone who could maintain it.”
Time and again, Pierce has found local Puerto Ricans to help him with development projects, but many of those collaborators later say they were exploited and underpaid. Meanwhile, he’s been locked in a court battle with another Act 60 immigrant, Joseph Lipsey III, who last year seized control of the W Hotel, claiming Pierce defaulted on a loan.
Pierce denies defrauding anyone. But at least three lawsuits are pending against him in local courts. Over coffee at the monastery, he admitted that his poor judgment and naivety derailed his plans in Puerto Rico. “I trusted people,” he said. “That’s one of the things that got me into trouble.”
Booing at a beauty pageant
Mr. Pierce likes to present himself as a geopolitical mover. In 2020, he ran for president of the United States as an independent and received nearly 50,000 votes. He boasted about having “dates” in El Salvador and Panama, and one evening in June, his assistant announced that Mr. Pierce would be joining a Zoom call with the president of Palau, a tiny archipelago in the western Pacific.
“I’ve spent a lot of time with leaders of nearly every religious faith in the world,” Pierce said at the monastery, “as well as leaders of many of the world’s nation states.”
But Pierce’s main focus is Puerto Rico, where he has become a leading spokesman for Act 60. After moving, he told Rolling Stone that he would rebuild the economy “with the money we saved from the IRS in a Robin Hood way.” The publicity has helped make Puerto Rico a popular destination for cryptocurrency enthusiasts: About 2,600 people currently take advantage of Act 60’s tax breaks, according to government data.
When Pierce arrived, locals showed strong opposition. Someone wrote in red paint on the wall of the Children's Museum: "Foreigners go home." But behind the scenes, Vieques was expanding his real estate empire. He hired Gonzalo Gracia, a well-known local hotel developer, to help him find buildings in Puerto Rico that could be restored and transformed into tourist attractions.
Pierce helped organize the 2021 Miss World pageant in San Juan. When he was introduced as one of the judges, the audience booed.
Soon, Pierce’s business progress began to sour, and he frequently got into legal disputes with local partners. In 2021, he helped organize the Miss World pageant at a concert venue in San Juan. By then, Pierce was already considered Puerto Rico’s opportunistic politician: When he was introduced as one of the judges, the crowd booed him. Later, he sued Puerto Rican pageant executive Stephanie del Valle, a former Miss World, claiming that she owed him $1.2 million. Ms. Del Valle fought back against the lawsuit against her, accusing Pierce of defamation and demanding $31 million in damages. (The dispute is pending in local court. Pierce says he is “committed to a fair resolution of this matter.”)
Del Valle was one of the first Puerto Ricans to clash with Pierce, accusing him of deceiving and manipulating them. During the pageant, Pierce bought an 80 percent stake in the W Hotels. The deal was one of his largest investments in Puerto Rico and paved the way for him to seek more than $30 million in tax credits from the local government.
Gracia assisted in the acquisition. He met with local Vieques officials on Pierce's behalf and found an architect to plan the hotel's reopening, court records show.
But the partnership was short-lived: Gracia claimed in a 2022 lawsuit that once the deal was finalized, Pierce cut him out of the project and refused to pay him his $790,000 commission.
A similar situation unfolded at another project on Vieques. In 2021, Pierce asked a local naval engineer to help him open a hotel-museum on a ship docked on the island’s northern coast. The engineer, who requested anonymity to avoid commercial repercussions, arranged meetings with local administrators and discussed the project with the mayor, but Pierce abruptly abandoned the plan. In an interview, he said Pierce still owed him $17,000 for the work. (Pierce says he has no such debt.)
Last year, there were signs that Pierce was stretched thin. He had asked De la Uz to repair the Aurora, the yacht he used to ferry friends to and from the West Coast. Most of the guests were “Americans that he had tried to convince to give him money,” De la Uz recalled. “He portrayed himself as the savior of Puerto Rico.”
In a 2023 lawsuit, De la Uz claimed that he and Pierce, who co-owned the yacht, had defaulted on repairs. De la Uz said the yacht was taking on water and slowly sinking into the Caribbean Sea as guests partied on the deck.
Pierce declined to comment on the allegations, saying: "We are actively working these matters through the courts to reach a fair resolution."
“I didn’t do any due diligence”
When Pierce goes out on the Aurora, he sometimes brings a newcomer to the Act 60 community: Lipsey, a 62-year-old logistics magnate. For a while, Pierce knew Lipsey only by his nickname, Jopepi. Pierce found him socially awkward but likable. “He’s a very kind person, I believe,” Pierce said.
Pierce knew only the general circumstances of Lipsey’s arrival in Puerto Rico. In 2017, Lipsey made a fortune from disaster relief efforts after Hurricane Maria through contracts with the U.S. government. But two years later, a legal scandal exposed his high-society life in Aspen, Colorado. A wild New Year’s party at Lipsey’s home led to a police investigation, and he and his wife eventually pleaded guilty to serving alcohol to minors and were sentenced to a year of probation.
The Lipseys sold their house in Aspen and eventually moved to Puerto Rico, settling near Mr. Pierce. Soon, the two families became close. Mr. Lipsey’s wife became friends with Mr. Pierce’s mother. After Ms. Calabro died of a heart attack in 2022, Mr. Lipsey said he had promised her that he would always be there for her family, Mr. Pierce recalled.
Pierce and Lipsey had worked together on various business projects, but one of their most significant deals involved the W Hotels. Last October, Lipsey agreed to lend Pierce $10 million, $4 million for the remaining 20% of the hotels and $6 million to invest in the bankrupt hospital chain. The terms were risky for Pierce: He had to close the hotel deal within two weeks. As collateral, he had to put up his entire stake in the W Hotels. Pierce said he felt uncomfortable with the demands but agreed to them anyway. “I didn’t do any due diligence,” he recalled.
A month after the agreement was signed, Lipsey accused Pierce of violating the agreement and seizing control of the hotel. Lipsey later claimed in legal documents that Pierce did not use the borrowed funds as planned, but instead spent the money on a private jet and a 72-hour birthday party that spanned San Juan, Miami and Los Angeles.
As the dispute escalated, Pierce asked Lipsey to meet at the Hacienda Tamarindo, a small hotel in Vieques that Pierce had purchased for $3.2 million. Lipsey later told Puerto Rican police that the meeting amounted to a kidnapping. Pierce demanded his cellphone and locked the door while an armed guard patrolled.
In 2021, Pierce purchased the boutique hotel Hacienda Tamarindo for $3.2 million
In court, Pierce denied embezzling borrowed money or kidnapping Lipsey. But one of his advisers, Cassandra Wesselman, who recently moved to Puerto Rico, said he was not in the best of frame of mind when the W Hotel dispute began. Ms. Wesselman said she was the one who suggested bringing armed guards to the Tamarindo estate to protect Mr. Pierce from a couple who were staying in another room. The couple, she explained, belonged to a cult.
A month after the contentious meeting, Pierce sued Lipsey in an attempt to regain control of W Hotels, accusing him of fraud and theft.
The judge denied Pierce’s request for an injunction that would have restored his ownership of the W while the case proceeded. Pierce and Lipsey have remained in touch to discuss a possible settlement. But their friendship is over.
Lipsey didn’t speak publicly about the dispute until July, when he discussed it for two hours with a New York Times reporter via WhatsApp. With a cigarette dangling from his lips, Lipsey virtually toured his Tennessee house, where he lives part of the year, and turned on his camera to show off his unusual art collection. On one wall hung a canvas with two splotches of red paint. It was the work of his son’s girlfriend, Lipsey explained.
Lipsey called Pierce "not a good person" and a bad businessman. "Everything he did with moving to Puerto Rico and everything he promised, he didn't do."
He said the same thing to Pierce’s face. In one heated exchange, Lipsey said, he called Pierce “a real disappointment to your mom.”
Carefree confidence
On a June morning, Pierce strolled through Old San Juan, winding his way along narrow sidewalks and pointing out his favorite spots along the way. Despite the heat, he was dressed in all black, as he does every day, so he wouldn’t have to agonize over time-consuming outfit choices. “Mark Zuckerberg and Steve Jobs, these guys wear the same thing every day,” Pierce explained.
He stopped outside Carly’s, an upscale jazz bar owned by the Puerto Rican pianist Muñoz. Mr. Pierce said Mr. Muñoz had written a song just for him and Ms. Rose. He smiled at the thought. “It’s called ‘Superhero,’ ” Mr. Pierce said. (The song’s actual title is “Super Power.”)
Even through all the setbacks, Pierce remains confident that he can be a force for progress in Puerto Rico. But his confidence masks the ongoing chaos in his business affairs. The conflict between Pierce and Lipsey has sparked intense speculation among his friends. Robert Anderson, a cryptocurrency enthusiast living in Puerto Rico who is friendly with Lipsey, said they acted "like kids."
Friends and associates of Pierce said he appeared to be running out of money. Lipsey’s lawyers argued in court that Pierce lacked the “money or resources” to develop the W. This summer, a representative of the Mets de Guaynabo, a Puerto Rican basketball team, emailed Pierce to complain that he had failed to pay more than $25,000 in sponsorship fees owed to the team, according to documents reviewed by The New York Times.
Pierce is dressed in all black, with a black hat, and sits on a stool in a white room
Mr. Pierce also expressed concern for his personal safety in Puerto Rico. He privately discussed plans to build an ammunition depot on Vieques, according to two people close to him. The depot, he said, would provide a measure of protection if locals rose up against him.
In a 17-page statement, Pierce denied that he had proposed the creation of the arsenal and said he was still wealthy, refuting suggestions that he was financially strapped. He said the complaint from the Mets de Guaynabo was a "misunderstanding" stemming from a misunderstanding of the terms of the sponsorship, which he has now agreed to pay.
However, just as the New York Times was finishing its story, a publicist for Pierce mistakenly sent a message to a group chat that included New York Times reporters and Ms. Wesselman, Pierce’s adviser: “We haven’t been paid yet.” “I guess you don’t have the money to pay us, otherwise you would have paid us long ago.” Wesselman laughed off the message, saying the publicist was “totally teasing us.” After learning that a reporter had seen the text message, the publicist said Pierce “always paid on time.”
Pierce defended his work in Puerto Rico. He said he had made charitable donations, including a six-figure gift to support Covid relief efforts in the region. “Transformative projects take time,” Pierce said, “and while some initiatives have faced challenges, others have had significant success.”
Among his many accomplishments, Pierce mentioned a hospital in the city of Humacao that he purchased in late 2023 — an investment he pitched to Lipsey. He said he worked with Puerto Rican radiologist Josué Vázquez Delgado to pull the hospital out of bankruptcy and retain more than 90% of its employees.
But in an interview, a doctor at the hospital who asked not to be named said Pierce owed him tens of thousands of dollars in wages. The doctor said the hospital had been late paying vendors and that some surgeons were running out of equipment. (Pierce said his team had addressed those issues and had “significantly improved the hospital’s operations.”)
Last month, Pierce tried to put a visual spin on his success in Puerto Rico while walking through San Juan. He led two New York Times reporters to a building he bought in 2019, which was simply furnished with a prominent TV screen. It houses, he claimed, the world’s first NFT art gallery. “You might not think of Puerto Rico as the first place in the world to pioneer technology,” he said. The images on display included a fluorescent dinosaur perched in a forest of giant cacti, which Pierce said was designed by his 5-year-old daughter using an artificial intelligence tool.
What he failed to mention was that a luxury real estate company had posted a notice for the building’s sale and held an open house. Confronted with this fact, Pierce admitted that he had recently tried to sell the gallery. He explained that it had never been fully open and that he had been struggling to make money.
