by Cindy Huynh
Jimmy Patronis, Florida’s Chief Financial Officer (CFO) is concerned about the impact of the growing cryptocurrency industry in Florida. He believes that Florida needs a state appointed cryptocurrency chief due to the risk of cryptocurrency-related scams.
Chief of Cryptocurrency to Assess Existing Regulations
Patronis released a statement on June 26, 2018, urging for extra assistance in regard to regulating cryptocurrency. “Florida can no longer remain on the sidelines when it comes to cryptocurrency,” said Patronis. He stated that a chief of cryptocurrency is needed for adequate oversight of cryptocurrency use throughout the state, in particular to understand how to apply existing laws to initial coin offerings (ICOs) and cryptocurrencies.
The cryptocurrency chief will work with the Office of Financial Regulation (OFR) and Office of Insurance Regulation (OIR) to develop policies, legislation, and regulations relevant to the cryptocurrency industry. The statement also mentioned that any ICO or cryptocurrency company based in Florida would be required to register with the OFR under the supervision of the state cryptocurrency chief.
Florida Feels Pressure to Protect Residents Against Cryptocurrency Scams
In his statement, Patronis mentioned the increasing need to take action against bad actors in the cryptocurrency industry. He used the Alabama Securities Commission and their cease and desist order to Platinum Coin as an example and stated that the government has a responsibility to protect its residents.
Patronis indicated particular concern for the potential exploitation of Florida’s considerable senior citizen population as another reason a cryptocurrency chief is necessary. He went on to state, “By taking an active, comprehensive and balanced approach, our state will provide an appropriate level of scrutiny for emerging digital asset technologies. It is absolutely essential that Florida create safeguards to protect our consumers from fraud.”
Increased Regulation of Cryptocurrency
While strict regulations could dampen the emerging blockchain and cryptocurrency industries, Patronis stated that his goal is not to interfere with the growth of the cryptocurrency sector. He mentioned that cryptocurrency is now accepted by many businesses in Florida, up to and including by the Seminole County Tax Collector, and stressed the importance of being able to monitor cryptocurrency use for “…fraudulent behavior and scams.”
Patronis’ belief that increased oversight of the industry will result in sufficient awareness of risks to protect the citizens of Florida from cryptocurrency scams is endorsed by Bill Galvano, the Senate President Designate. Galvano fully supports Patronis in his push to create the cryptocurrency chief position.
Patronis and Galvano are not alone in advocating increased regulation of the cryptocurrency sector. In early June 2018, the US Securities and Exchange Commission (SEC) also created a new senior advisory position responsible for overseeing securities regulation in the cryptocurrency industry. It appears as though new regulatory roles are emerging in response to the increasing number of cryptocurrency scams and the uncertain regulatory environment.