Florida Cryptocurrency Laws
Chapter 560, Florida Statutes – Money Services Businesses
“Money Transmitter” Definition
“Money transmitter” means a corporation, limited liability company, limited liability partnership, or foreign entity qualified to do business in this state which receives currency, monetary value, or payment instruments for the purpose of transmitting the same by any means, including transmission by wire, facsimile, electronic transfer, courier, the Internet, or through bill payment services or other businesses that facilitate such transfer within this country, or to or from this country.
“Currency” means the coin and paper money of the United States or of any other country which is designated as legal tender and which circulates and is customarily used and accepted as a medium of exchange in the country of issuance. Currency includes United States silver certificates, United States notes, and Federal Reserve notes. Currency also includes official foreign bank notes that are customarily used and accepted as a medium of exchange in a foreign country. “Monetary value” means a medium of exchange, whether or not redeemable in currency. 560.103 A “money services business” is defined as “any person … who acts as a payment instrument seller, foreign currency exchanger, check casher, or money transmitter.” § 560.103(22), Fla. Stat. (2014) (emphasis added). The Florida Legislature has defined a “payment instrument seller” in this section as “a corporation, limited liability company, limited liability partnership, or foreign entity qualified to do business in this state which sells a payment instrument.” § 560.103(30). Moreover, a “payment instrument” is “a check, draft, warrant, money order, travelers check, electronic instrument, or other instrument, payment of money, or monetary value whether or not negotiable.” § 560.103(29) (emphasis added). “Monetary value” means a medium of exchange, whether or not redeemable in currency. § 560.103(21) (emphasis added). State v. Espinoza, No. 3D16-1860, 2019 WL 361893, at *6 (Fla. Dist. Ct. App. Jan. 30, 2019)
The following entities are exempt from the provisions of this chapter: (1) Banks, credit card banks, credit unions, trust companies, associations, offices of an international banking corporation, Edge Act or agreement corporations, or other financial depository institutions organized under the laws of any state or the United States. (2) The United States or any agency or instrumentality thereof. (3) This state or any political subdivision of this state. 560.104
(1) LICENSE APPLICATION FEES.—The applicable non-refundable fees must accompany an application for licensure: (a) Part II……….$375. (b) Part III……….$188. (c) Per branch office……….$38. (d) For each location of an authorized vendor……….$38. (e) Declaration as a deferred presentment provider……….$1,000. 560.143
Bond and Insurance Requirements
(3) Before the office may issue a license under this part, the applicant must provide to the office a corporate surety bond, issued by a bonding company or insurance company authorized to do business in this state. (a) The corporate surety bond shall be in an amount as specified by rule, but may not be less than $50,000 or exceed $2 million. The rule shall provide allowances for the financial condition, number of locations, and anticipated volume of the licensee. (b) The corporate surety bond must be in a form satisfactory to the office and shall run to the state for the benefit of any claimants in this state against the applicant or its authorized vendors to secure the faithful performance of the obligations of the applicant and its vendors with respect to the receipt, handling, transmission, and payment of funds. The aggregate liability of the corporate surety bond may not exceed the principal sum of the bond. Claimants against the applicant or its authorized vendors may bring suit directly on the corporate surety bond, or the Department of Legal Affairs may bring suit on behalf of the claimants. 560.209
Bond Alternatives and Additional Insurance Requirements
(4) In lieu of a corporate surety bond, or of any portion of the principal sum required by this section, the applicant may deposit collateral cash, securities, or alternative security devices as provided by rule with a federally insured financial institution. (a) Acceptable collateral deposit items include cash and interest-bearing stocks and bonds, notes, debentures, or other obligations of the United States or any agency or instrumentality thereof, or guaranteed by the United States, or of this state. (b) The collateral deposit must be in an aggregate amount, based upon principal amount or market value, whichever is lower, of at least the amount of the required corporate surety bond or portion thereof. (c) Collateral deposits must be pledged to the office and held by the insured financial institution to secure the same obligations as the corporate surety bond, but the depositor is entitled to receive any interest and dividends thereon and may, with the approval of the office, substitute other securities or deposits for those deposited. The principal amount of the deposit shall be released only on written authorization of the office or on the order of a court of competent jurisdiction. 560.209
(1) A licensee must have a net worth of at least $100,000. A licensee operating in more than one location must have an additional net worth of $10,000 per location in this state, up to a maximum of $2 million. The required net worth must be maintained at all times. (2) A licensee must obtain an annual financial audit report, which must be submitted to the office within 120 days after the end of the licensee’s fiscal year, as disclosed to the office. If the applicant is a wholly owned subsidiary of another corporation, the financial audit report on the parent corporation’s financial statements shall satisfy this requirement. 560.209
Money Transmission License Required for Crypto Exchange?
State Comments or Statements
There is no dispute that Bitcoin does not expressly fall under the definition of “currency” found in section 560.103(11).3 However, Bitcoin does fall under the definition of a “payment instrument.” See § 560.103(29). Included in the definition of a payment instrument is “monetary value,” which is defined as “a medium of exchange, whether or not redeemable in currency.” §§ 560.103 (21), (29). According to the arrest affidavit and the FATF Virtual Currency Report, referenced above, bitcoins are redeemable for currency. Espinoza does not argue to the contrary. Similarly, Bitcoin and bitcoins function as a “medium of exchange.” State v. Espinoza, No. 3D16-1860, 2019 WL 361893, at *6 (Fla. Dist. Ct. App. Jan. 30, 2019)