Honduras Ratchets Up Battle with Crypto-Libertarian Investors | Hacker News Reader

Honduras Ratchets Up Battle with Crypto-Libertarian Investors

theintercept.com

47 pointsbertman56 comments

The version of the story without all the fnords: Honduras solicited investment in the form of charter cities, where corporations could buy pockets of land and run them however they wanted. Then a more socialist government came into power, reversed the law allowing them to exist, and refused to give them their money back. The biggest, Próspera, is suing to get their money back.

Worth noting, this is a standard risk in Latam and the government that introduced them made it a constitutional amendment with a ten-year reversal process, since they wouldn't get any investors otherwise. The primary complicating factor here in Próspera's lawsuit is that they have not actually lost their investment yet; nine years to go.

But Honduras's response is to withdraw from the court system and legal framework that Próspera's suing them in, the ICSID. If they actually go through with this, that's going to be the end of most foreign investment in Honduras at all, charter city or otherwise. The ICSID is there to ensure that your investment stake won't be confiscated by the government when political winds change; Honduras is withdrawing because it wants to do exactly that, and no investor will risk that happening to them.

Also despite the article saying 'crypto' a dozen times their only relation to crypto is accepting it as legal tender, same as neighboring El Salvador. Instead of 'DAOs avoiding the FTC' one should think 'biotech avoiding the FDA'.

I wonder if all the huge manufacturing factories near San Pedro Sula/Cortez will pack up and move to either El Salvador or Guatemala in response to this?

> Honduras solicited investment in the form of charter cities, where corporations could buy pockets of land and run them however they wanted. Then a more socialist government came into power, reversed the law allowing them to exist, and refused to give them their money back.

No mention of democratically elected government being ousted by US-backed coup, or the fact that this single company is asking for a third of the country’s GDP.

On crypto: you seem very confident about your position, yet if you talk to actual people on the ground, you’ll get a different story than you are proposing. Crypto advocates are bragging about this very subject. It started with El Salvador, but goes well beyond one country now.

And for the record… I am not anti-crypto. I have been involved with bitcoin for 9 years.

A “US-backed coup” is a bit misleading: Zelaya refused to follow the law, but the US didn’t back him - they tried to keep it from turning into a war before an election he was excluded from so the Honduran people could settle it democratically. I don’t like the realpolitik in avoiding recognizing his coup attempt as such but that’s not the same as backing him.

That is the narrative, sure, but is it the reality? Why would it ever be presented otherwise?

The US government refuses to follow its own laws.

It isn't "the narrative". The Honduran Supreme Court issues the arrest warrant. There was a congressional investigation that reviewed state department cables and found exactly what the part post is claiming.

https://en.m.wikipedia.org/wiki/2009_Honduran_constitutional...

Zelaya was constitutionally barred from re-election.

Post-coup

No, he was term-limited to the single term allowed by the constitution and was running anyway, with a fig-leaf of a referendum for a proposed constitutional convention to retroactively legalize the second term, the timing of which could never have allowed him to legally run for president. This was a “constitutional coup” by the judiciary designed to prevent an illegal second term that was clearly otherwise going to happen.

https://en.m.wikipedia.org/wiki/Honduran_fourth_ballot_box_r...

“Narrative” would be when you use “U.S.-backed coup” to describe a president refusing to leave office legally and the U.S. working to keep him out. There’s valid criticism that the U.S. should have been more aggressive in condemning it as a coup but none of the evidence suggests that the U.S. supported a coup in violation of Honduran law. The State department cables which were leaked show their focus was on preserving aid to people until a new election.

"Political winds change" like a US backed coup in 2009 that put the guy in power who made these laws? What international institution protects against that? Are countries bound by law if it was made by an illegitimate government?

Did you make an account just for this post?

Is that relevant to the question they asked?

yes. this is an election year and GPT is a thing.

shillbots gonna shill. this is a blatant one, which means it's low-effort; here to stir the pot. the real agi-prop effort will be a repost bot with a real looking history.

Nope. Real person, sorry! Yes i make a new account every time I lose my ddg session. Not llm spam. Just a very opinionated human/dog

The only US involvement in ousting Zelaya was the State Department asking neighboring countries not to intervene. The Supreme Court of Honduras issued the arrest warrant for him on their own. It was an entirely internal affair until after they tossed him onto a plane. And on top of that, the guy was trying to illegally change the constitution.

It stretches credulity that the US wasn't involved in some way. The state department had an opinion on what outcome they wanted [0] and it'd be out of character if they didn't put their thumb on the scale as much as was necessary to get the outcome they wanted.

We don't really need public acknowledgement to assume that the US is involved in American politics. If there is a coup in their back garden, they'll have someone there doing some pruning.

[0] https://en.wikipedia.org/wiki/2009_Honduran_coup_d%27%C3%A9t...

Yes, I've read the wikipedia article too. I was also studying Latin America in college at the time and can read Spanish so I was pretty closely following the issue.

Having an opinion on the outcome you want doesn't mean you're actively putting a thumb on the scale or driving events. The State Department has a position on almost ever major political event happening in the world. It can't possibly be intervening in all of them.

> If there is a coup in their back garden, they'll have someone there doing some pruning.

Except the US specifically stayed out of this and encouraged Honduras's neighbors not to get involved either. If the US had chosen to support Zelaya, then the people backing the Supreme Court would have called that a US intervention.

Is your standard that having an opinion on a foreign political outcome is tantamount to intervention? If not what is your standard and how does it apply here?

TIL what “fnord” is. I think that is a perfect way to describe much of this article.

_The Illuminatus Trilogy_ , where I learned this word, is a fantastic read.

When Ukraine told Russia it was not going to pay back loans (prior to invasion) the West applauded.

Today the West is seriously considering expropriating external Russian property. Also apparently there is nothing wrong with this.

But when a small country in what is "rightfully" the US' playground threatens to protect its sovereignty from US corporations, apparently this is a whole different story.

The strong do what they can and the weak suffer what they must. --Thucydides

> Honduras solicited investment in the form of charter cities, where corporations could buy pockets of land and run them however they wanted.

Bioshock: Jungle Edition

anyone else find this style of writing hard to follow?

Yes. Adding "narco-" in front of any previous leader or official the author apparently doesn't like doesn't do much to help with clarity.

Hard to tell what's going on from this article in that the author seems so biased against Prospera. Sounds like they made an agreement with one government that for various reasons lost power and that the new government wants to cancel the deal.

You can argue how often "narco-" should be used, but it's more than just someone "the author apparently doesn't like". The ex-president and his brother are literally convicted drug traffickers.

i think the readability would be improved if the author tossed in the prefix "crypto-" a few dozen more times.

The actual statements from the parties involved - The Prospera ZEDE and the executive branch - are at the bottom and far more coherent and cordial than the rest of the article suggests.

The rest of the article is hyperbolic trash. “Immense bipartisan pressure from the US to maintain the Honduras charter cities” = “2 US senators writing a … letter”

It's typical for some journalists. They just mash words together to make something look suspicious, but they don't really have a point to make.

Crypto is [mostly] for crime, laundering, etc. When will the tech industry get past this?

Snapchat is mostly for porn? Signal is mostly for drug dealers? Tor is mostly for pedophiles?

The early adopters of a technology are the users that need it the most, and have the highest opportunity cost from not using it. You can think of them as beta-testers for the "nothing to hide" folks. You are looking at the beginning of a technology and criticizing the beta-tester population.

The beginning? It’s been fifteen years. Hundreds of billions have been invested. We’ve been through several massive hype cycles.

If there is any potential for mainstream adoption of crypto, what exactly is holding it back at this point? It’s not new; it’s not obscure; and it’s certainly not underinvested.

Of course the crypto promoters will never admit that because the only reason to invest in crypto is this narrative — “it’s something brand new, very few people understand it, you can get in on the ground floor and be part of a revolution, etc.”

It is easy to understand the use-value: sovereignty over personal digital assets; sovereignty over transfer of said assets

Nobody seems to actually want that though. Most crypto owners just trade on centralized exchanges.

In practice, that sovereignty jargon is just an ideological veneer over unregulated penny stocks with no product-market fit.

> Nobody seems to actually want that though. Most crypto owners just trade on centralized exchanges.

I'm talking about what is important to me. I don't pretend to know what others want

when was the last time you bought anything with crypto?

like you drove to 7/11, got gasoline, a soda, and some chips, and paid with BTC?

how many people do you know bought a house with BTC? Not a BTC investment that they cashed out into USD, but just BTC?

Snapchat can be used for non-porn; BTC isn't used for anything.

Can be used to buy things illegally. Think ADHD meds or sanctions breaking.

In an ideal world, the ADHD meds where I live should be made available by GP prescription to reduce the backlog. Right now, it takes years to get a diagnosis free of charge, or to get a prescription for thousands of USD.

Of course, somebody (the dealer) will be left holding the bag after it unravels. But it's rich to ask sufferers to put their lives on hold.

Never?

Its a far more efficient "bug bounty" system than the tech industry has ever created. Far easier to get paid far more with far less liability.

Its the ultimate PvP game. far more efficient game against people for resources than walled garden finance or society has previously created. It will always attract participants.

And that's before even getting to the relativity of your nation's laws. Are you suggesting we care about some other country's capital controls because crypto use gets around those ... too? Is our go to response "wait, that's illegal laundering to move that much money... in China"

Its only confusing if you don't think about it.

Banks still [probably] have their place. But so does technology which gives me complete sovereignty over my assets.

By that argument we should also eliminate the internet, yes?

It is. That said, I know a bunch of people who use it to buy ADHD medication, who can't otherwise afford to get a prescription in a timely manner. And I don't even know that many people! I suppose there's many downsides to enabling crime, but there's some silver lining.

I read about these charter cities a few years ago [0]. All the theory around them seemed to have this libertarian zeal about it that kind of put the foreign investors ahead of the local, voting population. And basic government functions (voting, taxes, police) were simply ignored or not fully explained.

BTW, for the Americans, there are lots of charter cities going up in Puerto Rico. And they are also unpopular because rich foreigners pay lower or no taxes compared to a PR citizen.

[0] https://www.theatlantic.com/magazine/archive/2010/07/the-pol...

Not all of them, these have led to real non-tourism job growth in PR. And PR is US territory, the tax breaks are for citizens who move from the mainland - not foreigners. It’s actually a great setup for software companies who are required to hire some locals.

Is this the latest incarnation of disaster capitalism? In the 00's, companies were content to just capture the government and make it into what they wanted. Now it's an explicit agreement that they can do what they want?

Those are real questions and not just snark, regardless of how snarky I actually feel about this entire thing.

I am cautious in supporting these particular cities, since democratic primacy is a critical right that empirically leads to better results. That dealt with, there is a frame here where democratic power is preserved. The idea is that voting is done with the feet. There are a lot of obvious ways that is worse than voting by vote, but it is a much more powerful action.

In the long term that sort of charter city would need to transition to either a more standard model or something like the City of London - eventually becoming a tightly controlled geographic area where not a lot of people actually live. It worked well for the UK, I imagine it would work well elsewhere. If anything, corporate control runs the risk of being too effective and ending up as the command structure of some sort of colonial superpower.

Hopefully Prospera wins and the socialist president loses. Honduras would benefit from more foreign investment. She's not doing her people any favors.

Libertarian ideology colonialism attacking a souvreign nation state. Thing you do not see every day.

As I understand it, the previous govt invited the conquistadores and let them buy free reign.

And the souvreign changed his opinion on that. Corruption is not a trapdoor function, you can get rid of that.

You will also get rid of any trust from foreigners and, thus, any future foreign investment.

Sometimes keeping your word is more important that attainment of ideological purity. China can survive such a loss of trust, because it is a Behemoth of a nation and can live somehow regardless. Honduras much less so.

(I am saying this as a citizen of a small country who doesn't like all our commitments either, but the alternative of just going back on our word would be fairly detrimental to us long term.)

Was there really ever any trust, except for the - we can get away with bribing people and steal stuff as fast as we can carry and can get away with it? A dishonest merchant will only meet dishonest people.

This was a shockingly biased and information-sparse article. Really disappointing

Team-based politics cause bad feels when you see your team being criticized

I mean if your team are the drug lords of the previous government, then whelp. Maybe you picked the wrong team.

Both teams are the wrong team. That’s precisely the point

I'm not on a team. I have never been to Honduras and have no strong feelings about either side. The whole article is just a journalist describing a conflict between two groups of humans, while constantly using morally and emotionally negative language against one group and never sharing their perspective, while doing the opposite for the other group. This journalist doesn't even accurately describe the origin of the conflict, which the top comment here does. It's a fun mental exercise to read the article and count sheer number of Russell conjugations.

This is not the kind of document you write to inform your reader about the state of the world.

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