Florida Senate - 2022 SB 486 By Senator Brodeur 9-00015A-22 2022486__ 1 A bill to be entitled 2 An act relating to money services businesses; amending 3 s. 559.952, F.S.; revising exceptions to general laws 4 and rules for licensees during the Financial 5 Technology Sandbox period; amending s. 560.103, F.S.; 6 revising definitions; defining the term virtual 7 currency; amending s. 560.123, F.S.; revising the 8 purpose of the Florida Control of Money Laundering in 9 Money Services Business Act; revising the duties of 10 money services businesses; revising civil and criminal 11 penalties; amending s. 560.125, F.S.; revising 12 criminal and civil penalties for certain violations 13 relating to unlicensed activity involving money 14 services businesses and deferred presentment 15 providers; amending s. 560.204, F.S.; revising 16 provisions related to certain prohibited activities 17 without a license or an exemption; revising the 18 definition of the term compensation; amending s. 19 560.208, F.S.; revising requirements for a money 20 transmitter or payment instrument seller to conduct 21 business; amending s. 560.2085, F.S.; revising 22 requirements for written contracts between money 23 transmitters or payment instrument sellers and 24 authorized vendors; amending s. 560.210, F.S.; 25 requiring money transmitters that receive virtual 26 currency for specified purposes to hold a certain type 27 and amount of virtual currency until the transmission 28 obligation is completed; excluding such virtual 29 currency in the calculation of permissible 30 investments; amending s. 560.211, F.S.; revising 31 recordkeeping requirements for money transmitters or 32 payment instrument sellers; amending s. 560.212, F.S.; 33 revising financial liability requirements for money 34 transmitters or payment instrument sellers; providing 35 an effective date. 36 37 Be It Enacted by the Legislature of the State of Florida: 38 39 Section 1.Paragraph (a) of subsection (4) of section 40 559.952, Florida Statutes, is amended to read: 41 559.952Financial Technology Sandbox. 42 (4)EXCEPTIONS TO GENERAL LAW AND WAIVERS OF RULE 43 REQUIREMENTS. 44 (a)Notwithstanding any other law, upon approval of a 45 Financial Technology Sandbox application, the following 46 provisions and corresponding rule requirements are not 47 applicable to the licensee during the sandbox period: 48 1.Section 516.03(1), except for the application fee, the 49 investigation fee, the requirement to provide the social 50 security numbers of control persons, evidence of liquid assets 51 of at least $25,000, and the offices authority to investigate 52 the applicants background. The office may prorate the license 53 renewal fee for an extension granted under subsection (7). 54 2.Section 516.05(1) and (2), except that the office shall 55 investigate the applicants background. 56 3.Section 560.109, only to the extent that the section 57 requires the office to examine a licensee at least once every 5 58 years. 59 4.Section 560.118(2). 60 5.Section 560.125(1), only to the extent that the 61 subsection would prohibit a licensee from engaging in the 62 business of a money transmitter or payment instrument seller 63 during the sandbox period. 64 6.Section 560.125(2), only to the extent that the 65 subsection would prohibit a licensee from appointing an 66 authorized vendor during the sandbox period. Any authorized 67 vendor of such a licensee during the sandbox period remains 68 liable to the holder or remitter. 69 7.Section 560.128. 70 8.Section 560.141, except for s. 560.141(1)(a)1., 3., 7. 71 10. and (b), (c), and (d). 72 9.Section 560.142(1) and (2), except that the office may 73 prorate, but may not entirely eliminate, the license renewal 74 fees in s. 560.143 for an extension granted under subsection 75 (7). 76 10.Section 560.143(2), only to the extent necessary for 77 proration of the renewal fee under subparagraph 9. 78 11.Section 560.204(1), only to the extent that the 79 subsection would prohibit a licensee from engaging in, or 80 advertising that it engages in, the selling or issuing of 81 payment instruments or in the activity of a payment instrument 82 seller or money transmitter during the sandbox period. 83 12.Section 560.205(2). 84 13.Section 560.208(2). 85 14.Section 560.209, only to the extent that the office may 86 modify, but may not entirely eliminate, the net worth, corporate 87 surety bond, and collateral deposit amounts required under that 88 section. The modified amounts must be in such lower amounts that 89 the office determines to be commensurate with the factors under 90 paragraph (5)(c) and the maximum number of consumers authorized 91 to receive the financial product or service under this section. 92 Section 2.Subsections (14), (21), (23), (29), and (35) of 93 section 560.103, Florida Statutes, are amended, and subsection 94 (36) is added to that section, to read: 95 560.103Definitions.As used in this chapter, the term: 96 (14)Electronic instrument means a card, tangible object, 97 or other form of electronic payment used for the transmission, 98 or payment, of money or the exchange of currency or monetary 99 value, including a stored value card or device that contains a 100 microprocessor chip, magnetic stripe, or other means for storing 101 information; that is prefunded; and for which the value is 102 decremented upon each use. 103 (21)Monetary value means a medium of exchange, other 104 than virtual currency, regardless of whether it is or not 105 redeemable in currency. 106 (23)Money transmitter means a corporation, limited 107 liability company, limited liability partnership, or foreign 108 entity qualified to do business in this state which receives 109 currency, monetary value, a or payment instrument, or virtual 110 currency instruments for the purpose of acting as an 111 intermediary to transmit currency, monetary value, a payment 112 instrument, or virtual currency from one person to another 113 location or person transmitting the same by any means, including 114 transmission by wire, facsimile, electronic transfer, courier, 115 the Internet, or through bill payment services or other 116 businesses that facilitate such transfer within this country, or 117 to or from this country. The term includes only an intermediary 118 that has the ability to unilaterally execute or indefinitely 119 prevent a transaction. 120 (29)Payment instrument means a check, draft, warrant, 121 money order, travelers check, electronic instrument, or other 122 instrument used for the transmission, exchange, or payment of 123 currency money, or monetary value, regardless of whether it is 124 or not negotiable. The term does not include an instrument that 125 is redeemable by the issuer in merchandise or service, a credit 126 card voucher, or a letter of credit. 127 (35)Stored value means currency funds or monetary value 128 represented in digital electronic format, regardless of whether 129 it is or not specially encrypted, and stored or capable of 130 storage on electronic media in such a way as to be retrievable 131 and transferred electronically. 132 (36)Virtual currency means a medium of exchange in 133 electronic or digital format which is not currency. The term 134 does not include a medium of exchange in electronic or digital 135 format which is used: 136 (a)Solely within online gaming platforms, with no market 137 or application outside those gaming platforms; or 138 (b)Exclusively as part of a consumer affinity or rewards 139 program and which can be applied solely as payment for purchases 140 with the issuer or other designated merchants, but which cannot 141 be converted into or redeemed for currency, monetary value, or 142 virtual currency. 143 Section 3.Subsections (2), (3), and (4) and paragraphs 144 (b), (c), and (d) of subsection (8) of section 560.123, Florida 145 Statutes, are amended to read: 146 560.123Florida Control of Money Laundering in Money 147 Services Business Act. 148 (2)The purpose of this section is to require the 149 maintenance of certain records of transactions involving 150 currency, monetary value, or payment instruments, or virtual 151 currency in order to deter the use of a money services business 152 to conceal proceeds from criminal activity and to ensure the 153 availability of such records for criminal, tax, or regulatory 154 investigations or proceedings. 155 (3)A money services business shall keep a record, as 156 prescribed by the commission, of each financial transaction 157 occurring in this state which it knows to involve currency, 158 monetary value, a or other payment instrument, or virtual 159 currency as prescribed by the commission, having a value greater 160 than $10,000; to involve the proceeds of specified unlawful 161 activity; or to be designed to evade the reporting requirements 162 of this section or chapter 896. The money services business must 163 maintain appropriate procedures to ensure compliance with this 164 section and chapter 896. 165 (a)Multiple financial transactions shall be treated as a 166 single transaction if the money services business has knowledge 167 that they are made by or on behalf of any one person and result 168 in value cash in or value cash out totaling a value of more than 169 $10,000 during any day. 170 (b)A money services business may keep a record of any 171 financial transaction occurring in this state, regardless of the 172 value, if it suspects that the transaction involves the proceeds 173 of unlawful activity. 174 (c)The money services business must file a report with the 175 office of any records required by this subsection, at such time 176 and containing such information as required by rule. The timely 177 filing of the report required by 31 U.S.C. s. 5313 with the 178 appropriate federal agency shall be deemed compliance with the 179 reporting requirements of this subsection unless the reports are 180 not regularly and comprehensively transmitted by the federal 181 agency to the office. 182 (d)A money services business, or officer, employee, or 183 agent thereof, that files a report in good faith pursuant to 184 this section is not liable to any person for loss or damage 185 caused in whole or in part by the making, filing, or 186 governmental use of the report, or any information contained 187 therein. 188 (4)A money services business must comply with the money 189 laundering, enforcement, and reporting provisions of s. 655.50 190 relating to reports of transactions involving currency 191 transactions and payment instruments, as applicable, and of 192 chapter 896 concerning offenses relating to financial 193 transactions. 194 (8) 195 (b)A person who willfully violates any provision of this 196 section, if the violation involves: 197 1.Currency, monetary value, or payment instruments, or 198 virtual currency of a value exceeding $300 but less than $20,000 199 in any 12-month period, commits a felony of the third degree, 200 punishable as provided in s. 775.082, s. 775.083, or s. 775.084. 201 2.Currency, monetary value, or payment instruments, or 202 virtual currency of a value totaling or exceeding $20,000 but 203 less than $100,000 in any 12-month period, commits a felony of 204 the second degree, punishable as provided in s. 775.082, s. 205 775.083, or s. 775.084. 206 3.Currency, monetary value, or payment instruments, or 207 virtual currency of a value totaling or exceeding $100,000 in 208 any 12-month period, commits a felony of the first degree, 209 punishable as provided in s. 775.082, s. 775.083, or s. 775.084. 210 (c)In addition to the penalties authorized by s. 775.082, 211 s. 775.083, or s. 775.084, a person who has been convicted of, 212 or entered a plea of guilty or nolo contendere, regardless of 213 adjudication, to having violated paragraph (b) may be sentenced 214 to pay a fine of up to the greater of $250,000 or twice the 215 value of the currency, monetary value, or payment instruments, 216 or virtual currency whichever is greater, except that on a 217 second or subsequent conviction for or plea of guilty or nolo 218 contendere, regardless of adjudication, to a violation of 219 paragraph (b), the fine may be up to the greater of $500,000 or 220 quintuple the value of the currency, monetary value, or payment 221 instruments, or virtual currency whichever is greater. 222 (d)A person who violates this section is also liable for a 223 civil penalty of up to not more than the greater of the value of 224 the currency, monetary value, or payment instruments, or virtual 225 currency involved or $25,000. 226 Section 4.Subsections (5), (6), and (7) of section 227 560.125, Florida Statutes, are amended to read: 228 560.125Unlicensed activity; penalties. 229 (5)A person who violates this section, if the violation 230 involves: 231 (a)Currency, monetary value, or payment instruments, or 232 virtual currency of a value exceeding $300 but less than $20,000 233 in any 12-month period, commits a felony of the third degree, 234 punishable as provided in s. 775.082, s. 775.083, or s. 775.084. 235 (b)Currency, monetary value, or payment instruments, or 236 virtual currency of a value totaling or exceeding $20,000 but 237 less than $100,000 in any 12-month period, commits a felony of 238 the second degree, punishable as provided in s. 775.082, s. 239 775.083, or s. 775.084. 240 (c)Currency, monetary value, or payment instruments, or 241 virtual currency of a value totaling or exceeding $100,000 in 242 any 12-month period, commits a felony of the first degree, 243 punishable as provided in s. 775.082, s. 775.083, or s. 775.084. 244 (6)In addition to the penalties authorized by s. 775.082, 245 s. 775.083, or s. 775.084, a person who has been convicted of, 246 or entered a plea of guilty or nolo contendere to, having 247 violated this section may be sentenced to pay a fine of up to 248 the greater of $250,000 or twice the value of the currency, 249 monetary value, or payment instruments, or virtual currency 250 whichever is greater, except that on a second or subsequent 251 violation of this section, the fine may be up to the greater of 252 $500,000 or quintuple the value of the currency, monetary value, 253 or payment instruments, or virtual currency whichever is 254 greater. 255 (7)A person who violates this section is also liable for a 256 civil penalty of up to the greater of not more than the value of 257 the currency, monetary value, or payment instruments, or virtual 258 currency involved or $25,000, whichever is greater. 259 Section 5.Subsection (1) of section 560.204, Florida 260 Statutes, is amended to read: 261 560.204License required. 262 (1)Unless exempted, a person may not engage in, or in any 263 manner advertise that they engage in, the selling or issuing of 264 payment instruments or in the activity of a payment instrument 265 seller or money transmitter, for compensation, without first 266 obtaining a license under this part. For purposes of this 267 subsection section, the term compensation includes profit or 268 loss on the exchange of currency, monetary value, or virtual 269 currency. 270 Section 6.Subsections (5) and (6) of section 560.208, 271 Florida Statutes, are amended to read: 272 560.208Conduct of business.In addition to the 273 requirements specified in s. 560.1401, a licensee under this 274 part: 275 (5)Shall, in the normal course of business, ensure that 276 currency, monetary value, payment instruments, or virtual 277 currency money transmitted is available to the designated 278 recipient within 10 business days after receipt. 279 (6)Shall, immediately upon receipt of currency, monetary 280 value, a or payment instrument, or virtual currency, provide a 281 confirmation or sequence number to the customer verbally, by 282 paper, or electronically. 283 Section 7.Paragraph (b) of subsection (2) of section 284 560.2085, Florida Statutes, is amended to read: 285 560.2085Authorized vendors.A licensee under this part 286 shall: 287 (2)Enter into a written contract, signed by the licensee 288 and the authorized vendor, which: 289 (b)Includes contract provisions that require the 290 authorized vendor to: 291 1.Report to the licensee, immediately upon discovery, the 292 theft or loss of currency, monetary value, a payment instrument, 293 or virtual currency received for a transmission or for a payment 294 instrument sold; 295 2.Display a notice to the public, in such form as 296 prescribed by rule, that the vendor is the authorized vendor of 297 the licensee; 298 3.Remit all amounts owed to the licensee for all 299 transmissions accepted and all payment instruments sold in 300 accordance with the contract between the licensee and the 301 authorized vendor; 302 4.Hold in trust all currency, monetary value, or payment 303 instruments, or virtual currency received for transmissions or 304 for the purchase of payment instruments from the time of receipt 305 by the licensee or authorized vendor until the time the 306 transmission obligation is completed; 307 5.Not commingle the currency, monetary value, payment 308 instruments, or virtual currency money received for 309 transmissions accepted or payment instruments sold on behalf of 310 the licensee with the assets money or property of the authorized 311 vendor, except for making change in the ordinary course of the 312 vendors business;, and 313 6.Ensure that the currency, monetary value, payment 314 instruments, or virtual currency received for transmissions 315 accepted or payment instruments sold money is accounted for at 316 the end of the business day; 317 7.6.Consent to examination or investigation by the office; 318 8.7.Adhere to the applicable state and federal laws and 319 rules pertaining to a money services business; and 320 9.8.Provide such other information or disclosure as may be 321 required by rule. 322 Section 8.Present subsections (2) and (3) of section 323 560.210, Florida Statutes, are redesignated as subsections (3) 324 and (4), respectively, and a new subsection (2) is added to that 325 section, to read: 326 560.210Permissible investments. 327 (2)Each money transmitter that receives virtual currency, 328 either directly or through an authorized vendor, for the purpose 329 of transmitting the virtual currency from one person to another 330 location or person must at all times, until the transmission 331 obligation is completed, hold virtual currency of the same type 332 and amount owed or obligated to the other location or person. 333 Virtual currency received and held under this subsection is not 334 included in the amount of outstanding money transmissions for 335 purposes of calculating the permissible investments required by 336 subsection (1). 337 Section 9.Paragraphs (a), (e), and (f) of subsection (1) 338 of section 560.211, Florida Statutes, are amended, and paragraph 339 (j) is added to that subsection, to read: 340 560.211Required records. 341 (1)In addition to the record retention requirements under 342 s. 560.1105, each licensee under this part must make, keep, and 343 preserve the following books, accounts, records, and documents 344 for 5 years: 345 (a)A daily record of payment instruments sold and of 346 currency, monetary value, payment instruments, or virtual 347 currency money transmitted. 348 (e)Records of outstanding payment instruments and of 349 currency, monetary value, payment instruments, or virtual 350 currency money transmitted. 351 (f)Records of each payment instrument paid and of each 352 currency, monetary value, payment instruments, or virtual 353 currency money transmission delivered. 354 (j)Any additional records, as prescribed by rule, related 355 to virtual currency. 356 Section 10.Section 560.212, Florida Statutes, is amended 357 to read: 358 560.212Financial liability.A licensee under this part is 359 liable for the payment of all currency, monetary value, payment 360 instruments, or virtual currency money transmitted and payment 361 instruments that it sells, in whatever form and whether directly 362 or through an authorized vendor, as the maker, drawer, or 363 principal thereof, regardless of whether such item is negotiable 364 or nonnegotiable. 365 Section 11.This act shall take effect January 1, 2023.