The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Appropriations Committee on Agriculture, Environment, and General
Government
BILL: CS/SB 662
INTRODUCER: Banking and Insurance Committee and Senator Burton
SUBJECT: Virtual Currency Kiosk Businesses
DATE: February 12, 2024 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Moody Knudson BI Fav/CS
2. Sanders Betta AEG Favorable
3. FP
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
Senate Bill 662 establishes a regulatory framework for virtual currency kiosk businesses, and
provides protections for users of the kiosks by requiring such businesses to register with the
Office of Financial Regulation (OFR), requiring certain disclosures, restricting the name under
which such business may transact, and providing penalties for specified violations of the part.
The Legislative intent of the bill is, in summary, to reduce unlawful and fraudulent activities.
The bill provides the OFR is responsible for supervising virtual currency kiosk businesses, and
authorizes the Financial Services Commission (commission) to adopt rules to regulate them.
Registration requirement
The bill prohibits, effective March 1, 2025, a virtual currency kiosk business from operating in
Florida without first registering, or renewing its registration, with the OFR. A money transmitter
licensed as a money services business (MSB) is exempt from registering as a virtual currency
kiosk business. An entity that acts as an intermediary in specified circumstances and or otherwise
meets the definition of a money transmitter must be licensed as a money services business. For
an applicant to register a virtual currency kiosk business, the applicant must submit specified
information relating to the proposed applicant and business, attest to specified information
relating to blockchain analytics, and within a specified time, any supplemental information
required by the OFR. A virtual currency kiosk business operating in Florida on or before
January 1, 2025, must submit a registration application to the OFR within 30 days after that date.
BILL: CS/SB 662 Page 2
Disclosures, Attestations, and Confirmations
The bill requires that owner-operators:
 Display a disclosure warning consumers about potential dishonest schemes and requiring the
customer to acknowledge that they have read the disclosure.
 Display a disclosure that funds lost due to user error or fraud may not be recoverable.
 With respect to virtual currency kiosk businesses, confirm w whether the customer is using
the kiosk to send virtual currency to a wallet owned by someone else and, if so, terminate the
transaction unless the owner-operator is a licensed money transmitter.
 Display a disclosure of a toll-free telephone number the kiosk user may call to learn about the
risks of the transaction; and
 Require an attestation to specified information, without which the transaction must be
terminated.
The bill authorizes the commission to adopt rules to administer the section on disclosures,
including to ensure the disclosures are responsive to consumer fraud and emerging technology.
Conduct of Business
An owner-operator may transact business only under the legal name by which it is registered,
except a fictitious name may be used in specified circumstances. An owner-operator must
maintain clearly documented policies, processes, and procedures regarding how blockchain
analytics activity integrates into their compliance, and must apply such blockchain analytics to
prevent transfers to wallet addresses linked to known criminal activity.
Penalties
The bill provides criminal penalties for violating the disclosure requirements, operating under
any name other than that designated in the registration (unless written notification is given to the
OFR), assigning or attempting to assign a registration, and operating a virtual currency kiosk
without using the required blockchain analytics.
The bill has a minimal impact on state revenue and expenditures. See Section V. Fiscal Impact
Statement.
Except as otherwise provided, the bill is effective January 1, 2025.
II. Present Situation:
A virtual currency kiosk, also known as a cryptocurrency kiosk or a Bitcoin automatic teller
machine (ATM), is a physical machine that enables customers to exchange virtual currencies for
fiat currency or other virtual currencies.1 As of 2022, there were over 30,000 virtual currency
1
National Association of Attorneys General, Your Bitcoin on Every Block: An Introduction to Cryptocurrency Kiosks,
May 4, 2022, available at Your Bitcoin on Every Block: An Introduction to Cryptocurrency Kiosks (naag.org) (last visited
Jan. 31, 2024) (hereinafter cited as “Attorneys General Article on Cryptocurrency Kiosks”).
BILL: CS/SB 662 Page 3
kiosks in the United States.2 Consumers are typically charged fees between nine percent and
12 percent of the value of the transaction but such fees may range from four percent to greater
than 20 percent of the value of a transaction.3
A virtual currency kiosk may be unidirectional, only allowing the sale of virtual currency, or
bidirectional, allowing for both the sale and purchase of virtual currency.4 To purchase virtual
currency from a kiosk, a consumer may store the purchased virtual currency in their own wallet
or send the currency to a third party’s wallet if the purchaser has a quick response (QR) code to
that person’s wallet.5 To sell virtual currency from a kiosk, a user deposits virtual currency into
the machine’s wallet, which is usually done by use of a QR code displayed on the kiosk’s screen,
and the kiosk dispenses cash when the transaction is completed.6
Federal Regulation
Financial Crimes Enforcement Network (“FinCEN”), a bureau of the United States Department
of Treasury7 is responsible for safeguarding the financial system from illegal use, combatting
money laundering and related crimes, and promoting national security.8 Unless an exception
applies, a money services business9 (MSB) must register with FinCEN.10 A MSB must
registration period is a two-calendar-year period.11 Any person who fails to comply with the
registration requirements is liable for a civil penalty of $5,000 for each violation.12 A MSB must
develop, implement, and maintain an anti-money laundering program, which includes, amongst
other things, verifying customer identification.13 A MSB must also comply with anti-money
laundering reporting requirements, such as reporting certain payment transactions by, though, or
to the MSB which involves a transaction more than $10,000.14
2
McDonnell, S., United States: US GAO Urges New Virtual Currency Regulations to Counter Human Trafficking and Drug
Cartels, Jan. 2022, available at US GAO Urges New Virtual Currency Regulations To Counter Human Trafficking And
Drug Cartels - Fin Tech - United States (mondaq.com) (last visited Jan. 31, 2024) (hereinafter cited as “Article on US GAO
Urges New Virtual Currency Regulations”) .
3
Attorneys General Article on Cryptocurrency Kiosks
4
Id.
5
Id.
6
Id.
7
31 C.F.R. s. 1010.100(s).
8
The U.S. Treasury Financial Crimes Enforcement Network, Financial Crimes Enforcement Network: Mission, available at
Mission | FinCEN.gov (last visited Jan. 24, 2024).
9
“Money services business” is defined as a person wherever located doing business, whether or not on a regular basis or as
an organized or licensed business concern, wholly or in substantial part within the United States, in one or more of the
capacities specified under federal law. 31 C.F.R. s. 1010.100(ff).
10
31 C.F.R. s. 1022.380(a).
11
31 C.F.R. s. 1022.380(b).
12
31 C.F.R. s. 1022.380(e) (providing that each day a violation continues constitutes a separate violation).
13
31 C.F.R. s. 1022.210.
14
31 C.F.R. s. 1010.311.
BILL: CS/SB 662 Page 4
FinCEN has issued guidance that, unless an exception applies, an administrator15 or exchanger16
that: (a) accepts or transmits, or (b) buys or sells, virtual currency17 is a money transmitter that
are subject to money services business registration, reporting, and recordkeeping requirements.18
Therefore, FinCEN treats virtual currency kiosk operators as MSBs, subject to registration
regulations.19 Notwithstanding this requirement, the United States Government Accountability
Office (“GAO”) reports that only 164 of the estimated 297 kiosk operators in the United States
were registered, which has contributed to federal agencies, such as FinCEN, facing challenges in
identifying virtual currency kiosk locations.20
Florida Regulation of Consumer Finance
The Florida Office of Financial Regulation (OFR) is responsible for all activities of the Financial
Services Commission (commission) relating to the regulation of banks, credit unions, other
financial institutions, finance companies, and the securities industry.21
Money Services Businesses
As part the OFR’s responsibilities, the OFR oversees MSBs. As of December 31, 2023, there
were a total of 723 MSBs licensed by the OFR.22 A MSB includes any person located or doing
business in Florida who acts as, amongst other things, a money transmitter.23 “Money
transmitter” means a corporation, limited liability company, limited liability partnership, or
foreign entity qualified to do business in Florida which receives currency, monetary value, a
payment instrument, or virtual currency24 for the purpose of acting as an intermediary to transmit
15
“Administrator” is defined as a person engaged as a business in issuing (putting into circulation) a virtual currency, and
who has the authority to redeem (to withdraw from circulation) such virtual currency. The U. S. Treasury FinCEN,
Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies, Mar. 18, 2013,
available at Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies |
FinCEN.gov (last visited Jan. 31, 2024) (hereinafter cited as “FinCEN Guidance on Persons Administering, Exchanging, or
Using Virtual Currency”).
16
“Exchanger” is defined as a person engaged as a business in the exchange of virtual currency for real currency, funds, or
other virtual currency. Id.
17
“Virtual Currency” is defined as a medium of exchange that operates like a currency in some environments, but does not
have all of attributes of real currency. “Convertible” virtual currency has an equivalent value in real currency, or acts as a
substitute for real currency. Id.
18
FinCEN Guidance on Persons Administering, Exchanging, or Using Virtual Currency. “Money transmitter” is defined as a
person who provides money transmitter services, which means the acceptance of currency, funds, or other value that
substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency
to another location or person by any means. “Any means” includes, but is not limited to, a financial agency or institution, a
Federal Reserve Bank, an electronic funds transfer network, or an informal value transfer system.
31 C.F.R. s. 1010.100(ff)(5)(A).
19
Id.; See also Article on US GAO Urges New Virtual Currency Regulations.
20
The GAO, Virtual Currencies Additional Information Could Improve Federal Agency Efforts to Counter Human and Drug
Trafficking [Reissued with Revisions Feb. 7, 2022], GAO-22-105462, Published: Dec. 8, 2021, Publicly Released:
Jan. 10, 2022, available at https://www.gao.gov/products/gao-22-105462 (last visited Jan. 31, 2024).
21
Section 20.121(3)(a)2., F.S.
22
The OFR, 2024 Agency Legislative Bill Analysis Florida Office of Financial Regulation SB 662, p. 2, Jan. 8, 2024 (on file
with the Senate Committee on Banking and Insurance) (hereinafter cited as “2024 OFR Agency Analysis for SB 662”).
23
Section 560.103(23), F.S.
24
Section 560.103(36), F.S., defines “virtual currency” as a medium of exchange in electronic or digital formal that is not
currency. The term does not include a medium of exchange in electronic or digital format that is: (a) issued by or on behalf of
a publisher or offered on the same game platform; or (b) used exclusively as part of a consumer affinity or rewards program
BILL: CS/SB 662 Page 5
currency, monetary value, a payment instrument, or virtual currency from one person to another
location or person by 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. The term includes only an intermediary
that has the ability to unilaterally execute or indefinitely prevent a transaction.25 Money
transmitters reported $423,270,012,517 in transmissions during the Fiscal Year 2022-2023.26
Licenses issued to MSBs are valid until April 30 of the second year following the date of
issuance and are valid for two years.27 A MSB that does not renew its license by April 30 of their
expiration year are deemed inactive and, if the license is not reactivated within 60 days, the
license will permanently expire.28 An MSB need only pay the renewal or reactivation fee online
via the Regulatory Enforcement and Licensing (REAL) System to renew or reactivate a license.29
Once licensed, an MSB is required to report any change in control persons.30,31 If any person,
directly or indirectly or acting by or through one or more persons, proposes to purchase or
acquire a controlling interest in an MSB, such person or group must submit a new application for
licensure at least 30 days before such purchase or acquisition.32 Such a change of control
application is not required where the person or group of persons has previously complied with
applicable licensing provisions, provided that they are currently affiliated with the MSB, or
where the person or group of persons is currently licensed with the OFR as an MSB.33 A change
and can be applied solely as payment for purchases with the issuer or other designated merchants but cannot be converted
into or redeemed for currency or another medium of exchange.
25
Section 560.103(24), F.S.
26
2024 OFR Agency Analysis for SB 662 at p. 3.
27
Section 560.141(2), F.S.
28
Section 560.142(4), F.S.
29
2024 OFR Agency Analysis for SB 662 at p. 3.
30
Section 560.103(10), F.S., defines “Control person,” with respect to a money services business, as any of the following:
(a) A person who holds the title of president, treasurer, chief executive officer, chief financial officer, chief operations officer,
chief legal officer, or compliance officer for a money services business; (b) A person who holds any of the officer, general
partner, manager, or managing member positions named in the money services business’s governing documents. As used in
this paragraph, the term “governing documents” includes bylaws, articles of incorporation or organization, partnership
agreements, shareholder agreements, and management or operating agreements; (c) A director of the money services
business’s board of directors; (d) A shareholder in whose name shares are registered in the records of a corporation for profit,
whether incorporated under the laws of this state or organized under the laws of any other jurisdiction and existing in that
legal form, who owns 25 percent or more of a class of the company’s equity securities; (e) A general partner or a limited
partner, as those terms are defined in s. 620.1102, F.S., who has a 25 percent or more transferable interest, as defined in
s. 620.1102, F.S., of a limited partnership, limited liability limited partnership, foreign limited partnership, or foreign limited
liability limited partnership, as those terms are defined in s. 620.1102, F.S. (f) A member, who is a person that owns a
membership interest in a limited liability company or a foreign limited liability company, as those terms are defined in
s. 605.0102(36) and (26), F.S., respectively, that holds a 25 percent or more membership interest in such company. As used
in this subsection, the term “membership interest” means a member’s right to receive distributions or other rights, such as
voting rights or management rights, under the articles of organization; (g) A natural person who indirectly owns 25 percent or
more of the shares or stock interest, transferable inte