The Mayor of Miami's crypto scam is only costing working people
Miami's crypto catastrophe, explained. Plus, some January 6th thoughts.
Welcome to a Friday evening edition of Progress Report.
We’ve got a twofer for you tonight. First up, a story by a new contributor to Progress Report. Thomas Kennedy will fill us in on Miami Mayor Francis Suarez’s obsession with crypto and the grift he’s pulling on working people in one of the most economically stratified cities in the country.
It’s an important story not just because it’s hurting people in Miami, but because with crypto money infiltrating our politics and skewing elections, it’s a sign of what’s to come if it’s not quickly regulated in a major way (and no, this new bill doesn’t count).
I’ve worked with Thomas on some projects over at More Perfect Union, so I’m excited to have his work appear here at Progress Report. He is a member of the DNC and Florida Democratic Party, though he’s been a harsh critic of the latter’s emphasis on corporate money over grassroots organizing and any semblance of an election strategy. He’s also one of the reporters that relentlessly presses Ron DeSantis on his corruption and abandonment of working class Floridians. The governor does not like him.
After Thomas’s piece, I’ll offer some thoughts on the January 6th committee hearing, where I think it erred, and why it could still prove so important to saving American democracy.
by Thomas Kennedy
Late last year, I saw Miami Mayor Francis Suarez at Caffe Abbracci, a swanky windowless Italian restaurant in Coral Gables that would not be out of place in a Sopranos episode.
Under Suarez’ tenure, the City of Miami has become the most unaffordable market for both prospective homeowners and renters in the nation. As a resident of the city, I felt compelled to ask Suarez about the housing crisis gripping Miami.
“Mayor, we need less bitcoin and more affordable housing. What are you doing to keep people in their homes?” I asked.
His answer left me speechless. He simply turned to me and said, “MiamiCoin is worth $16 million.”
It’s been a few years now since Suarez has been singularly focused on pushing cryptocurrency to the detriment of his other responsibilities as mayor. At the recent Bitcoin Conference hosted in Miami Beach, Suarez articulated what he calls a “vision for Bitcoin America 2024,” calling for the next president of the United States to be “pro-Bitcoin” and for Bitcoin to be integrated into “every aspect of our society.”
Perhaps the most infamous crypto scheme associated with Suarez is MiamiCoin, which has lost nearly all of its value since receiving the mayor’s endorsement, plummeting 95% from its peak last year to now fractions of a penny.
So what is MiamiCoin?
One of the best explanations is detailed by tech expert Mike Bloomberg (not the mayor), who we recently had the pleasure of interviewing. He compares the process of acquiring MiamiCoin to a raffle in which CityCoin users bet Stack tokens for a chance to create MiamiCoin. If they do, and the odds are unknown, 30% is automatically sent to the City of Miami’s digital wallet and the remainder is kept by the user per an agreement between Miami and CityCoins, the company that actually owns MiamiCoin.
CityCoins is not only focused on Miami. Other cities like New York and Austin have explored similar cryptocurrency partnerships, but none with the same level of enthusiasm as the Magic City. That’s largely because of Suarez’s endorsement of the project and his promotion of Miami Coin to residents and investors.
Media outlet Quartz obtained emails between representatives of CityCoins and Suarez’s staff showing that the mayor’s media appearances promoting MiamiCoin were creating problems for the project and could cause regulatory red flags:
“We need to get an hour with the Mayor for a comms training session on CityCoins and MiamiCoin. It’s great that he is doing press but he would greatly benefit from an hour session with Patrick on how to best communicate the project. There are a few regulatory wires the Mayor has tripped in recent interviews and it’s really important for the sustainability of the project that he is better prepared. We really care about the Mayor and his role in making MiamiCoin a success—it’s critical that we get time with him as soon as possible.”
In one appearance for Fox & Friends, Suarez claimed that the revenue generated by City of Miami’s stake in Miami Coin would be given “as a “dividend to all of our residents in Bitcoin” through a “digital wallet.” Towards the end, Suarez makes the eyebrow-raising claim that “if this thing continues to grow, there is a world under which we can actually run the city without taxes.”
When confronted later by Fox News host Neil Cavuto on Miami Coin’s sharp loss of value, Suarez once again doubled down by again promising to distribute part of the yield from Miami’s stake in MiamiCoin to residents, something that he called “very innovative” while claiming that he doesn’t obsess “over the price” of MiamiCoin.
If that sounds too good to be true, it’s because it is. I’m a Miami resident myself and I can personally tell you that I am still waiting for both my “Bitcoin dividend” and the day in which Miami no longer needs tax money to run.
So how could such an obvious grift by a guy that looks and sounds like he is literally selling you snake oil slither on and on until it inevitably imploded? The mainstream media and their rosy coverage of Suarez and his crypto schemes shoulder a fair amount of the blame.
A Washington Post article from September 2021 provides an embarrassingly uncritical and shallow portrayal of MiamiCoin, stating that Suarez has a plan to transform the city into the world’s “cryptocurrency innovation hub” and presenting his claim that it could result in a “metropolis free from taxes” as a “lofty idea” that goes unchallenged throughout the piece. It reads like a press release by Suarez’s team, with no questions regarding sustainability, conflicts of interest, or regulatory red flags.
Miami residents are facing real issues. As I said before, we have the most unaffordable housing and renting market in the country. Our infrastructure is lackluster and our streets severely flood when our sewage and drainage systems are stressed by a normal rainstorm. The public transportation system is almost nonexistent and not a viable option for the thousands of workers who live in this city.
Instead of focusing on addressing these basic but challenging problems, Suarez is focused on “innovation” through cryptocurrency schemes that never materialize into anything substantial for long-time Miamians and instead only serve to increase his public profile through appearances at tech events.
What mayors tout as “innovations” in their cities are often just short-term public relations gimmicks. Crypto companies like CityCoins provide an opportunity for mayors to pretend they are innovative and line the pockets of their donors while ignoring actual issues that are inconvenient and require difficult choices. With crypto, the danger to the public is compounded by their extreme volatility and the fact that they aren’t backed by anything except investor confidence.
In the case of MiamiCoin, all the red flags have been proven correct. As previously stated, the currency has lost over 95% of its value and is now pretty much worthless. In the process, investors and residents have lost money and there are calls for regulators to step in and investigate Miami’s political leadership and their dealings with shady crypto companies like CityCoins.
Francis Suarez is now trying to have it both ways, still defending MiamiCoin while saying that he never “pushed for anything” when asked if other places should adopt cryptocurrencies. To anyone who has been paying attention, the record is clear, Suarez was neck-deep in advocating and promoting MiamiCoin, and in the end, we don’t have much to show for it except an increasingly unaffordable city and a whole bunch of people who lost a lot of money.
by Jordan Zakarin
I saved this edition of Progress Report for tonight because I felt fairly certain that anyone that subscribes to this newsletter was more than likely spending their Thursday evening focused on the Jan. 6th Committee hearing. More than 20 million Americans watched the hearing on one of the three main broadcast networks alone, while MSNBC and CNN scored exponential bumps in their primetime viewing numbers. I have no statistics as of yet as to how long people stayed tuned in to the event, which is sort of an essential figure.
Calling it an “event” is probably somewhat hyperbolic, considering the sobriety of the hearing. Aside from the footage of the insurrection and the right-wing chatter that led up to the violent invasion of the Capitol, which was masterfully edited and shocking even 18 months later, the proceedings were a bit monotone and monotonous. Some parts of the testimony were painful and outrageous; other parts were superfluous given the constraints of time and attention spans. Why were we listening to a British documentarian describe the route he took with taco-seeking Proud Boys? There was too much CSPAN-2, not enough Trial of the Century.
In an ideal world, exposés of this magnitude — and politics more generally — wouldn’t need to be entertaining; just imagine the Nuremberg trials being broadcast with flashy graphics and a charismatic host. But sometimes you have to meet the voters where they are, especially when there are thousands of TV channels and infinite viewing options available on streaming services; that’s a big part of how Trump won in the first place. This hearing was Must See TV for political junkies and journalists, but I can’t imagine the more casual and curious viewer stuck around for very long. (The New York Times’ TV critic disagrees with me, and I hope he’s proven correct.)
So, save for some really blockbuster revelations in the coming weeks, I don’t think that the hearings will sway many hearts or minds; the battle lines and different planes of reality were drawn on this issue within a few months of the insurrection. Ultimately, though, what really matters is whether or not the hearings sway one person in particular: Attorney General Merrick Garland.
Garland has been either deliberate in preparing or disinterested in pressing charges against Trump for his leading roles in trying to overturn the election and encouraging the insurrection. In outlining the former president’s obsession with shredding democracy amid his inner circle’s desperate attempts to get him to give up the ghost, the committee proved beyond doubt that Trump was well aware of the actual election results, which is key to winning a conviction on conspiracy charges.
If Garland still refuses to bring charges, the hearings will be largely forgotten within a few weeks’ time. Journalists won’t stick with the story without a steady stream of new revelations or a newsy trial to breathlessly report on, and soon enough, they’ll go back to treating both parties as equally legitimate political actors. Voters will forget even sooner. It’s clear that the committee is working to make the legal case more so than the public one. I hope they nail it.