FL Legislature considering cryptocurrency-friendly bill

Miami Mayor Francis Suarez, a loud proponent for tech investments in South Florida, has quietly pushed legislation that could create the state’s first meaningful financial regulations for cryptocurrency.

But the mayor whose pro-business agenda and campaign coffers have benefited handsomely from Miami’s place in the tech spotlight might be striking out in Tallahassee.

The measure, which would pave the way for a wider use of Bitcoin, Ethereum and other such cryptocurrencies, and more clearly define how they fit into the existing financial system, passed the House last week in a unanimous vote.

But the legislation has stalled in the Senate during the final days of the legislative session. Sen. Jeff Brandes, a St. Petersburg Republican sponsoring the bill in the Senate, said the bill is highly unlikely to pass this year. In a text message to a reporter, he said the bill’s chances were “80% no.”

Suarez, who believes the conversation is crucial to interests statewide and in Miami, where the mayor has led a sustained public relations effort to attract Silicon Valley investors to South Florida, said of the bill when contacted Monday by the Miami Herald: “We need this to be passed if we are to position ourselves as the state that is most innovative and fosters the most innovation.”

The effort is dwindling after it gained traction and bipartisan support in the Florida House. The House bill sponsor, Rep. Vance Aloupis, who represents a stretch of Miami-Dade from Doral to Palmetto Bay, suggested the debate can carry over into the future because Florida has remained silent on regulating cryptocurrency, unlike other states.

“At the very least, it began a very important conversation that wasn’t happening before in the capitol,” Aloupis said in an interview with the Miami Herald on Tuesday.

“There’s been a lot of confusion over how Florida was going to regulate cryptocurrency,” Aloupis added. “The intention here was to write into statute the definition of virtual currency and begin to move into a direction of creating a regulatory structure of cryptocurrency.”

The legislation has support from state regulators and private industry.

Florida’s Office of Financial Regulation, led by Chief Financial Officer Jimmy Patronis, was also involved in the legislative effort, according to disclosure forms. The office’s chief financial regulator, Russell C. Weigel, III, said his staff got involved in the legislation effort because of a Miami-based Bitcoin money-laundering case. The case exposed a need for fixes in the statutes that regulate cryptocurrency, he said.

Weigel said he remains hopeful the bill will pass the Senate, but is not sure about its fate.

“If the bill goes thorough, it would have made our job a lot easier,” he said in an interview.

The bill has also found support from Oportun Inc., a personal loan company founded to help Latino immigrants build credit. The company is among the groups that lobbied for the bill, according to online disclosure forms filed with the House. In August 2020, a ProPublica investigation found that the company routinely charged high interest rates and filed lawsuits to intimidate borrowers, even during the COVID-19 pandemic.

Suarez connection

Suarez’s support for the bill has not previously been reported.

As the bill’s unofficial booster, Suarez went to Tallahassee in mid-March and connected industry people with lawmakers, according to Aloupis. The mayor sought to keep his advocacy quiet after public disagreements with Gov. Ron DeSantis’ approach to the pandemic strained his relationship with top Tallahassee Republicans. The mayor, who is usually vocal in supporting tech-friendly initiatives on social media, did not disclose he was pushing the cryptocurrency legislation when asked by a reporter in March about his activities in Tallahassee.

Suarez has been public in his support for governments investing in cryptocurrency, one facet of a broader push to attract the tech industry to Miami. His efforts have made him a known name in tech circles and led to hefty campaign donations from tech investors. In March, cryptocurrency investor Michael Komaransky gave $50,000 into a political committee for the mayor’s reelection. Komaransky famously sold his Miami mansion for Bitcoin in 2018.

Suarez helped attract the world’s largest Bitcoin conference to Miami. The event, scheduled for June 3-5 at the MANA Wynwood center, will feature talks by Twitter CEO Jack Dorsey and billionaire venture capitalist Chamath Palihapitiya — another Suarez donor who contributed a quarter-million dollars in February.

In February, Miami commissioners agreed to explore allowing residents to pay municipal fees with Bitcoin and city employees to receive all or part of their salaries in Bitcoin. Administrators are still studying the concept, along with the feasibility of investing some of the city’s treasury in cryptocurrency. An April 20 draft memo from the city attorney’s office outlines a way the city can hire a vendor, through competitive bidding, to handle cryptocurrency transactions with the public and employees.

Suarez is also an attorney at Greenspoon Marder, a law firm with a cryptocurrency practice, though he said in an interview that “nothing that I do regarding cryptocurrency involves the firm.” When the Herald pointed out on Monday that Greenspoon’s website listed the mayor as a member of its cryptocurrency practice, the mayor said the listing was inaccurate and a mistake.

“That was done without my authorization,” he said. “I have no idea how that happened.”

The firm’s website also lists Suarez as of-counsel at Greenspoon, working in the corporate and business practice group and focusing on real estate transactions. Citing confidentiality rules, the mayor has declined to identify his clients or disclose the work he’s done for them.

Late Monday night, Suarez’s name was removed from Greenspoon’s cryptocurrency webpage. Louis Terminello, a partner and member of the firm’s management committee, said on Tuesday that Suarez has never worked on cryptocurrency and his inclusion on the website was a mistake made by a former marketing department manager.

“He’s not a cryptocurrency lawyer for this firm,” Terminello said. “I can find no evidence in our email records of him being asked to be in the group, him agreeing to be in the group or him ever being ratified to be in the group.”