Cash, card or crypto? Florida License Requirement for Cryptocurrency | Butler Snow srl

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From what appears to be the beginning of time, cash currency has dominated the commerce of monetary compensation. Starting in the 1950s, cash encountered one of its toughest competitors: the credit card. The debit card in the 1970s built on the idea of ​​digital currency, allowing people to access all of their funds and exchange currency by swiping a plastic rectangle. The credit card and debit card reigned supreme in digital currency for almost 40 years, until the rise of a new competitor: cryptocurrency.

The use of cryptocurrency has exploded since the introduction of Bitcoin. People have created a high-value market for the use of cryptocurrency, steadily increasing its value by opening more channels that allow currency to be traded between those who own it. The use of currency has progressed from local person-to-person exchange to the point where some businesses have engaged in contract negotiations and currency exchanges using strictly cryptocurrency.

So what happens when cryptocurrency becomes dominant to the point of what seems like no return? The State of Florida regulates it. As of January 1, 2023, Florida enacted a bill that imposes a licensing requirement on issuers when conducting transactions involving what the Sunshine State considers “virtual currency,” but this licensing requirement does not apply. applies only to specific issuers. In HB 273, the Florida Legislature defines virtual currency as “a medium of exchange in electronic or digital form that is not currency.” Excluded from this definition are online platforms that have their own distinct forms of currency that cannot be traded outside of that platform (i.e. online video games with their own forms of “currency” given to make purchases throughout the game). The legislation also appears to exclude rewards program points that can be converted for use strictly with the publisher giving the rewards points so long as those points cannot be “converted or redeemed for currency or other means of payment.” ‘exchange”. In other words, the licensing requirement only applies to cryptocurrency exchanges that involve a third-party intermediary for currency conversion.

While the legislation may seem intimidating and restrictive at first glance, the intention of the legislator actually reveals the opposite. Instead, Florida intends to reduce the possibility of money laundering by using the popular “virtual currency” in business transactions. Along with the licensing requirement, HB 273 requires the third-party issuer to hold virtual currency of the same type and exact amount as transmitted to the currency recipient until the transmission is complete.

What to do

For businesses transacting with cryptocurrency and third-party issuers, the key to avoiding violating this Florida law is ensuring that the intermediary transmitting the currency meets licensing requirements. Licensing requirements include having at least $100,000, corporate bonds, and authorized investments. Failure to comply with licensing requirements when applicable to the issuer could result in liability to Florida criminal money laundering laws.

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