Office of Financial Regulation hails new crypto oversight


Written by lauren lamb on March 15, 2022

Commercial

Office of Financial Regulation Praises New Crypto Oversight

Three of the four bills that Russell Weigel, Florida’s top financial regulator, had hoped would pass passed the Legislature this month. These bills aim to modernize Florida banking with cryptocurrency control, an identification solution, and bank modernization.

The only bill that did not pass was the Securities Reform under the Office and Sale of Securities. Said bill sought to exclude certain offers and sales of securities by a specific person from the exemption of specific registration requirements, reviewing the information and documents that the Office of Financial Regulation may require for the registration of securities.

The Digital Currency Expansion Bill brings cryptocurrency into the category of money service businesses. Revises provisions related to money services violations, trading activities, and penalties for violations, and provides requirements for money transmitters receiving virtual currency.

“Florida is the first state to officially regulate and enter the world of virtual currency,” said Mr. Weigel, who heads the state’s Office of Financial Regulation. “There is the potential backing of digital asset banking. If that’s something a bank would like to do in Florida, the cryptocurrency feature is helpful… We published guidance in January for our registered bank constitutions reminding them that they are under existing legal authority.”

“Florida offers a lot of scope for institutions that are thinking about doing things like digital assets and doing it under our authority,” he said. “It is not a change in legislation but a reminder that we have fair flexibility in the state scheme.”

The bank modernization bill that passed “allows banks to propose an online presence rather than a geographic presence,” Weigel said, and will prevent all banks from having to have a physical presence.

“Banking will evolve from a geographically focused concept of brick-and-mortar stores to one that includes a target market,” he said. Banks can now propose business plans that are not geographically focused as in the past, but can propose business plans around categories or people as their focus, Weigel said.

The third bill passed was the FBI’s Fingerprint Fix bill. “It took a lot of time and effort to get this done with the legislative and committee staff,” Mr. Weigel said. “It’s a redefinition of what a control person is, so [the legislature] I wanted to have his hand to articulate what he looked like.”

The FBI Fingerprint Correction Bill provides that a controlling person, or any person holding the office of president or a person holding the position of officer in the money services of the documents governing a business, has the responsibility for having the Department of Law Enforcement conduct a criminal background check. check through the FBI.

Each listed screening employee must undergo live scan fingerprint processing and must be submitted electronically and entered into a state identification system.

“The Fingerprint Bill is really a redefinition of the legal authority of the class of people who want to apply for a Fintech license,” Mr. Weigel said. Financial Technology Sandbox may prorate license renewal fees if the individual is under investigation.

The bills that have passed and await the governor’s signature to become law, he summarized, will help moderate cryptocurrencies under federal security, allow banks to focus on their customers rather than geographic location, and redefine the process of FBI pick.