F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 977 2024
1 A bill to be entitled
2 An act relating to virtual currency kiosk businesses;
3 amending s. 560.103, F.S.; defining terms; amending s.
4 560.105, F.S.; requiring the Office of Financial
5 Regulation of the Financial Services Commission to
6 supervise registrants; authorizing the commission to
7 adopt rules; creating part V of ch. 560, F.S.,
8 entitled "Virtual Currency Kiosk Businesses"; creating
9 s. 560.501, F.S.; providing legislative intent;
10 creating s. 560.502, F.S.; prohibiting a virtual
11 currency kiosk business from operating without
12 registering with the state; providing exemptions;
13 requiring certain entities to be licensed as money
14 services businesses; providing criminal penalties for
15 money transmitters that operate or solicit business as
16 a virtual currency kiosk business under certain
17 circumstances; providing criminal penalties for
18 persons who register or attempt to register as a
19 virtual currency kiosk business by certain means;
20 providing that a virtual currency kiosk business
21 registration is not transferable or assignable;
22 creating s. 560.503, F.S.; specifying application
23 requirements for registering as a virtual currency
24 kiosk business; requiring a registrant to report
25 certain changes in information within a specified
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26 timeframe; specifying requirements for a registrant to
27 renew its registration; requiring that the
28 registration of a virtual currency kiosk business be
29 made inactive if such business does not renew its
30 registration by a certain date; specifying
31 requirements for a virtual currency kiosk business to
32 renew its registration after becoming inactive;
33 providing that a registration becomes null and void
34 under certain circumstances; prohibiting the office
35 from accepting certain applications under certain
36 circumstances; requiring that certain applications be
37 denied under certain circumstances; providing that
38 certain false statements made by the virtual currency
39 kiosk business render registration void; providing
40 construction; authorizing the commission to adopt
41 rules; creating s. 560.504, F.S.; specifying
42 requirements for certain disclosures and attestations
43 displayed by the virtual currency kiosk; authorizing
44 the commission to adopt rules; creating s. 560.505,
45 F.S.; requiring a registrant to transact business
46 under its legal name; providing exceptions; creating
47 s. 560.506, F.S.; requiring a registrant to hold new
48 customers' assets in initial transactions in
49 segregated wallets for a specified period before
50 initiating transactions; authorizing customers to
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51 request refunds during such holding periods;
52 authorizing such customers' assets to be sold at
53 market value and returned to the customers; requiring
54 certain customers to be queried for specified
55 information under certain circumstances; creating s.
56 560.507, F.S.; providing criminal penalties for
57 violation of certain provisions or performing certain
58 acts; authorizing a court to invalidate the
59 registration of a registrant under certain
60 circumstances; providing an effective date.
61
62 Be It Enacted by the Legislature of the State of Florida:
63
64 Section 1. Present subsections (4) through (36) of section
65 560.103, Florida Statutes, are redesignated as subsections (5)
66 through (37), respectively, and a new subsection (4) and
67 subsections (38) through (41) are added to that section, to
68 read:
69 560.103 Definitions.—As used in this chapter, the term:
70 (4) "Blockchain analytics" refers to the process of
71 examining, monitoring, and gathering insights from the data and
72 transaction patterns on a blockchain network. The primary aim of
73 blockchain analytics is to understand and monitor the network's
74 health, track money flows, and identify potential security
75 threats, including illicit activity, to extract actionable
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76 insights.
77 (38) "Virtual currency kiosk" means an electronic terminal
78 that acts as a mechanical agent of the owner-operator, enabling
79 the owner-operator to facilitate the exchange of virtual
80 currency for fiat currency or other virtual currency for a
81 customer.
82 (39) "Virtual currency kiosk business" or "registrant"
83 means a corporation, limited liability company, limited
84 liability partnership, or foreign entity qualified to do
85 business in this state which operates a virtual currency kiosk
86 and which is not a money transmitter as defined in this section.
87 (40) "Virtual currency kiosk transaction" means the
88 process in which a customer uses a virtual currency kiosk to
89 exchange virtual currency for fiat currency or other virtual
90 currency. A transaction begins at the point at which the
91 customer is able to initiate a transaction, after the customer
92 is given the option to select the type of transaction or
93 account, and does not include any of the screens that display
94 the required terms and conditions, disclaimers, or attestations.
95 (41) "Wallet" means hardware or software that enables
96 customers to store and use virtual currency.
97 Section 2. Paragraph (a) of subsection (1) and paragraph
98 (b) of subsection (2) of section 560.105, Florida Statutes, are
99 amended to read:
100 560.105 Supervisory powers; rulemaking.—
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101 (1) The office shall:
102 (a) Supervise all money services businesses and their
103 authorized vendors and registrants.
104 (2) The commission may adopt rules pursuant to ss.
105 120.536(1) and 120.54 to administer this chapter.
106 (b) Rules adopted to regulate money services businesses,
107 including deferred presentment providers and registrants, must
108 be responsive to changes in economic conditions, technology, and
109 industry practices.
110 Section 3. Part V of chapter 560, Florida Statutes,
111 consisting of ss. 560.501-560.507, Florida Statutes, is created
112 and entitled "Virtual Currency Kiosk Businesses."
113 Section 4. Section 560.501, Florida Statutes, is created
114 to read:
115 560.501 Legislative intent.—The Legislature intends to
116 reduce unlawful and fraudulent activities by requiring virtual
117 currency kiosk businesses to register with the state and by
118 requiring such businesses and money transmitter licensees to
119 regularly and consistently disclose to all customers of virtual
120 currency kiosks certain specified risks relating to virtual
121 currency kiosk transactions.
122 Section 5. Section 560.502, Florida Statutes, is created
123 to read:
124 560.502 Registration required; exemptions; penalties.—
125 (1) A virtual currency kiosk business in this state may
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126 not operate without first registering, or renewing its
127 registration, in accordance with s. 560.503 and being issued a
128 certificate of registration by the office.
129 (2) A money transmitter licensed as a money services
130 business pursuant to s. 560.141 is exempt from registration as a
131 virtual currency kiosk business but is subject to ss. 560.504,
132 560.505, and 560.506.
133 (3) If an entity, in the course of its business, acts as
134 an intermediary with the ability to unilaterally execute or
135 indefinitely prevent a virtual currency kiosk transaction, or
136 otherwise meets the definition of a money transmitter as defined
137 in s. 560.103, the entity must be licensed pursuant to s.
138 560.141.
139 (4) Unless licensed as a money services business pursuant
140 to s. 560.141, a money transmitter that operates or solicits
141 business as a virtual currency kiosk business without first
142 being issued a certificate of registration by the office or
143 without maintaining a certificate of registration commits a
144 felony of the third degree, punishable as provided in s.
145 775.082, s. 775.083, or s. 775.084.
146 (5) A person who registers or attempts to register as a
147 virtual currency kiosk business by means of fraud,
148 misrepresentation, or concealment commits a felony of the third
149 degree, punishable as provided in s. 775.082, s. 775.083, or s.
150 775.084.
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151 (6) A virtual currency kiosk business registration issued
152 under this part is not transferable or assignable.
153 Section 6. Section 560.503, Florida Statutes, is created
154 to read:
155 560.503 Registration applications.—
156 (1) To apply to be registered as a virtual currency kiosk
157 business under this part, the applicant must submit all of the
158 following to the office:
159 (a) A completed registration application on forms
160 prescribed by rule of the commission which must include the
161 following information:
162 1. The legal name, including any fictitious or trade names
163 used by the applicant in the conduct of its business, and the
164 physical and mailing address of the applicant.
165 2. The date of the applicant's formation and the state in
166 which the applicant was formed, if applicable.
167 3. The name, social security number, alien identification
168 or taxpayer identification number, business and residence
169 addresses, and employment history for the past 5 years for each
170 person who meets the definition of a control person.
171 4. A description of the organizational structure of the
172 applicant, including the identity of any parent or subsidiary of
173 the applicant, and the disclosure of whether any parent or
174 subsidiary is publicly traded.
175 5. The name of the registered agent in this state for
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176 service of process.
177 6. The physical address of the location of each virtual
178 currency kiosk through which the applicant proposes to conduct
179 or is conducting business in this state.
180 7. Any other information as required by this chapter or
181 commission rule.
182 (b) A nonrefundable fee in accordance with s.
183 560.143(1)(b).
184 (c) Any information needed to resolve any deficiencies
185 found in the application. This information must be submitted
186 within 30 days after the date of the application or the date of
187 any request by the office, whichever is later.
188 (2) A registrant shall report, on a form prescribed by
189 rule of the commission, any change in the information contained
190 in an initial application form, or an amendment thereto, within
191 30 days after the change is effective.
192 (3) A registrant must renew its registration annually on
193 or before December 31 of the year of expiration. A registrant
194 may not receive a prorated fee for registration. To renew such
195 registration, the registrant must provide all of the following:
196 (a) The information required in paragraph (1)(a) if there
197 are changes in the application information, or an affidavit
198 signed by the registrant that the information remains the same
199 as the prior year.
200 (b) Upon request, evidence that the registrant has been
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201 operating in compliance with ss. 560.504 and 560.505. Such
202 evidence may be prescribed by rule by the commission and may
203 include, but is not limited to, all of the following:
204 1. Current disclosures presented to customers during the
205 transaction process.
206 2. Current use of blockchain analytics to prevent
207 transfers to wallet addresses linked to known criminal activity.
208 (4) The registration of a virtual currency kiosk business
209 that does not renew its registration by December 31 of the year
210 of expiration must be made inactive for 60 days. A virtual
211 currency kiosk business may not conduct business while its
212 registration is inactive.
213 (5) Within 60 days after the registration becoming
214 inactive pursuant to subsection (4), a virtual currency kiosk
215 business must renew its registration by submitting all of the
216 following:
217 (a) The information required in p