Dancing to the Rhythm of Crypto and the Coup of Little Havana
COCONUT GROVE, FLORIDA – When City of Miami Commissioners discovered that the cryptocurrency Mayor Francis X. Suarez was proposing to pay its employees with was not insured by the FDIC and that the digital paycheck was liable to lose its face value from one day to the next, due to market fluctuations on the price of Bitcoin, the director of the city’s procurement department Annie Perez, chastised the officials for overstepping their “purview”.
Emails and other documents obtained by Motherboard, detail the internal clashes elicited by the project to turn Miami into a cryptocurrency haven by the first native-born Mayor in the city’s history. “I’ve spoken to a major developer, who doesn’t want to say who they are, that is about to announce a hundred million-dollar position [on Bitcoin] and they may, at some point also announce the ability to buy homes in Bitcoins,” Suarez offered as his most persuasive argument in front of municipal dais in February, when his resolution to look into the possibility of paying city employees in Bitcoin was passed with a 4-1 vote.
Miami’s real estate development sector has historically served as a linchpin for massive money laundering operations and tax-evading capital flight from Latin America, in particular. Miami-Dade County, as a whole, has seen a boom in luxury condominium projects over the last five to six years, which largely depends on foreign buyers in search of a place to park their often illicitly-gained millions, since there is no local market to speak of in a city that boasts one of the highest wealth gaps in the country.
Ironically, the Mayor’s soliloquy was preceded by a contrived exchange with Commissioner Joe Carollo about the potential for money laundering in the crypto space, which was countered by Suarez using a familiar refrain of cryptocurrency enthusiasts, who assert that such activities are just as prevalent in the current fiat money system. Carollo, who is the main defendant in a $28 million lawsuit served on the City of Miami on Thursday by several bars and restaurants in Little Havana, nevertheless declared his unwavering support for the young Mayor.
The Commissioner is alleged to have engaged in severe violations and abuse of power as part of a personal vendetta against Ball & Chain, Taquerias El Mexicano and other service establishments that resulted in the suspension of their liquor licenses and other forms of harassment, causing the businesses to shut down temporarily in an ongoing and highly-publicized battle that goes back many years.
The bombshell legal action comes on the heels of another scandal that rocked Miami City Hall earlier this summer, when recently-appointed Police Chief Art Acevedo – recruited by Suarez, himself – claimed the city was run by a “Cuban mafia“, accusing commissioners of “meddling” in his efforts to change the culture of the city’s infamous Police department. City leaders called a second meeting on Friday to discuss Acevedo’s future, who four days ago exhorted the FBI to investigate corruption among city officials, naming Carollo specifically along with two other Commissioners in a 8-page memo, which has predictably led to a major escalation of the fracas.
Neither the City of Miami nor its Police department are strangers to scandal. But, this one has implications that reach far beyond local politics, given its intertwining with Suarez’ push to make Miami the first American city to adopt cryptocurrencies as an official form of payment and even for tax collection purposes. On September 14, Commissioners approved a measure that allows the City to accept $4.3 million generated through a project called MiamiCoin in a partnership that started in August with cryptocurrency startup CityCoins, Inc.
While Suarez and company play politics by assuring the public that the money will not be spent until “significant due diligence” has been effected, the scaffold has already been put in place to implement “the decentralized applications that can be built on top of this programmable token”, according to a CityCoin statement to the Miami Herald. CityCoin creator Patrick Stanley is confident that “every startup city will have its own CityCoin within two years in the United States” (emphasis added).
The Book of Bitcoin
Stanley’s dream hinges on Miami as the pilot program and Mayor Francis Suarez as his de facto project lead. The Johns Hopkins University graduate in economics and brain sciences, was the Head of Growth for Blockstack PBC (now Stacks), founded by a Pakistani computer scientist Muneeb Ali and fellow Princeton grad Ryan Shea in 2013. It developed the STX protocol or Blockstack Token, which undergirds MiamiCoin and has the unique distinction of being the first company approved by the SEC to raise money via a token sale.
In 2019, its first IPO raised over $23 million from various investors, including Winklevoss Capital (of Facebook-founding fame), Techcrunch founder Michael Arrington and Digital Currency Group, whose grip on the Bitcoin market writ-large and links to global finance capital was covered in-depth by Silicon Icarus in Bitcoin, the Next Evolution of Global Financial Empire.
The STX protocol allows smart contracts to be executed on the Bitcoin network, opening the door for the popular cryptocurrency to compete in a space currently dominated by its main competitor, Ethereum. MiamiCoin is only available to be transacted on the Okcoin cryptocurrency trading platform, founded in China by Mingxing “Star” Xu with headquarters in San Francisco and offices in Hong Kong, Malta and Police Chief Acevedo’s previous hometown of Houston, Texas.
Given Miami’s large Cuban exile community and anti-communist sentiment, the crypto scheme’s links to a Chinese national who has been arrested twice on suspicion of the unauthorized withdrawal of digital assets from the platform, will likely escape coverage in the local media or direct references by the staunchest promoters of MiamiCoin.
Suarez, who comes from a long political lineage in Miami (his father Xavier Suarez was the first Cuban-born Mayor of the city), will probably keep any allusions closer to home and rely on the Bitcoin advocacy company Freehold, founded by CityCoin’s Stanley in September 2020, to spread the Bitcoin gospel, which he likes to compare to the “Mormon door-to-door missionary program”.
By the Authority Vested in This Smart Contract
Last summer, Mayor Suarez suggested that the U.S. government should consider bombing Cuba in response to the country’s response to the civilian protests of July. Pressed by the incredulous Fox News anchor, the son of Cuban immigrants elaborated that there was “a variety of ways the military can do it”.
In such proclamations, Suarez isn’t very different from his fellow reactionary conservative compatriots like Marco Rubio, the Diaz-Balart brothers or even his father in advocating American military intervention in Latin America. But, it was the first time such rhetoric was applied by any of them to the motherland.
Far from a radical break, it is clear from his public approach to cryptocurrencies, that he is simply employing the latest political balderdash to target the ‘alt-right’, self-styled Libertarian factions of the Internet generation, who have emerged in the wake of the made-for-social-media presidency of Donald Trump.
In a March 2020 interview with the conservative publication National Review, Suarez extoled the “mathematical principals and concepts that underlie the technology” and made the same tired arguments one might hear from any number of ‘bitcoin bros’ on the Web, including Bitcoin’s ostensible invulnerability to manipulations by “federal authority”.
Clearly for Suarez, federal authority is a matter of expediency and not principle. In any case, his campaign to make Miami the cryptocurrency capital of the world was buttressed by the tacit support of Silicon Valley’s FinTech royalty and “PayPal mafia” member Keith Rabois’ with his arrival to the Magic City and Republican “mega donor” Paul Singer’s Elliot Management, which moved its headquarters not far to West Palm Beach in the fall of 2020.
Behind the appeals to ‘freedom’ and financial independence professed by so many cryptocurrency adherents lies the far less ‘free’ reality of programmable money, which MiamiCoin and other municipal cryptocurrency schemes are designed to bring about. Through smart contracts residing on the digital ledger known as blockchain, municipal cryptocurrencies will be used to disburse conditional payments to residents, which can be expanded to virtually any human activity within city limits.
Worse still, these contracts – which can be coded to govern anything from disabilities payments to food stamps – will be operated by artificial intelligence (AI) algorithms, completely devoid of any human mediation or interaction beyond the individual or families receiving the payments. More importantly, these contracts are to be securitized in order for the municipality to make money.
“When you think about the possibility of being able to run a government without the citizens having to pay taxes. That’s incredible,” Suarez told The Washington Post on Thursday when asked about the MiamiCoin project. Incredible, indeed. Under the MiamiCoin smart contract token model, taxes would be replaced by the investments of the Singers and Rabois of the world, who would fund municipal government operations and wait for a return on their investments, that are in turn, generated by the residents of the city through their participation in the pathways government has determined for their lives or simply traded on the open market.
Crypto Coup
Perhaps the choice of Art Acevedo to lead the Miami PD was motivated by factors other than the reform of its police force. Maybe the former member of the Gates-funded Council for a Strong America, a bipartisan organization comprised of American law enforcement and military officers, was plucked away from 21 years as Houston’s Chief of Police to cause mayhem at Miami City Hall and deliver a coup for the young Mayor and his new best friends in FinTech.
Acevedo’s relationship to the same interests pushing blockchain technology and impact investment models as government-funding mechanisms can be traced to his advocacy work on behalf of Ready Nation, an international non-profit organization that promotes private-public partnerships to “improve the future global workforce” through investments in pre-K programs and early childhood development courses.
The Omidyar Network, Vanguard, KPMG, the World Bank and the Bezos Foundation are just a few of the organizations that are involved with Ready Nation in a concerted effort to exploit the “burgeoning new field for social innovation and entrepreneurship” they have decided to target in early childhood, which has an ROI (return on investment) of 13%, according to the Nobel Prize winning economist Jim Heckman, whose theories underscore virtually all impact investment models in regards to the education of young children.
The entrenched generation of ‘el exilio’ holding court in the former Pan-Am terminal building next to Dinner Key marina are too old to understand the vision of the new generation like procurement director, Perez, who sent her entire staff to train at the Miami Innovation Academy, a monthly digital literacy course, in 2019. The three Commissioners named in Acevedo’s memo might be too big of a risk for Suarez’ grand plan, which has already seen Goldman Sachs, SoftBank and Blackstone open up offices in South Florida and crypto wallet Blockchain.com moving its headquarters from New York to Miami, calling the Mayor’s “regulatory environment” a veritable “hotbed of crypto innovation”.
