The OKcoin exchange said the trading suspension will take effect on Friday, March 17, at 2:59 a.m. Eastern Time. The exchange is also halting trades in New York City’s NYCCoin, another token created on the CityCoins platform.
“We will restore CityCoin trading as soon as possible,” OKcoin said. “While we don’t know when that will be, we [will] provide our community with updates as soon as we have more to share.”
The exchange claims unexpectedly low liquidity for MiamiCoin could open up “the possibility of price manipulation and fraudulent activity.” The exchange claims that while it has not identified malfeasance, it is halting trading “to get ahead of any possible misconduct.”
This news is not entirely unexpected as MiamiCoin floundered not long after it launched in August 2021. Since its peak in September 2021 at roughly 6 cents, the digital coin has lost virtually all its value.
MiamiCoin is down 88% from it’s all time high. If you invested $1,000 in September, it’s now worth $120. And your rent went up 36%. #BecauseMiami https://t.co/yqE2dQNbA0 pic.twitter.com/yYzP4GFbBS
— Because Miami (@BecauseMiami) February 2, 2022
CityCoins, a nonprofit, says it created its platform to allow investors to support cities and fund local projects while earning cryptocurrency for themselves. In a raffle-type setup, the platform required crypto miners to deposit STX, an outside cryptocurrency, in exchange for the opportunity to be rewarded in CityCoin tokens such as MiamiCoin.
MiamiCoin was the first digital token on CityCoins, in part owing to Mayor Francis Suarez’s enthusiasm for cryptocurrency. (He once called himself the “most bitcoin friendly mayor on the planet.”) Under normal operations, the city received a 30 percent allocation of the deposited cryptocurrency tied to MiamiCoin.
“It is exciting that $MIA is the first CityCoin, as Miami has long been an epicenter of culture and innovation in the U.S.,” CityCoins creator Patrick Stanley said. “We’re are confident that Miami Coin will demonstrate to other cities that adopting new technologies can propel local initiatives, improve city infrastructure, and more.”
With his sights set on transforming Miami into the “crypto capital of the world,” Suarez went all in with his support for the digital token.
“Miami will benefit from the use of the MiamiCoin and from the branding that is associated with it,” Suarez said during an appearance on Fox Business in July 2021. “That will go directly into our general fund so we can use that to alleviate homelessness… We can focus on policing and increasing our police force… and we can focus on a variety of other things that the city does very well to increase our quality of life for our residents.”
Two months later, the crypto-friendly mayor appeared on Fox Business where he boasted that the city’s MiamiCoin revenue could eventually replace city taxes. At one point, he proposed that local businesses and restaurants should start thinking of accepting Miami Coin as another form of payment.
“It’s actually generating somewhere in the vicinity of several thousand dollars every 10 minutes,” Suarez claimed. “It could potentially generate over the course of a year upwards of 60 million dollars.”
While MiamiCoin seemed to be a profitable endeavor for the city, investors and minor dealing in the coin were already alarmed by wild swings in its value in 2021.
ICYMI my interview on MiamiCoin w/ @FoxBusiness
✅The revolutionary concept of @mineCityCoins
✅Understanding how it’s generated $5M+ for the City
✅How these benefits translate into a better quality of life for Miamians pic.twitter.com/ipewPwBMdw
— Mayor Francis Suarez (@FrancisSuarez) September 20, 2021
As Suarez continued to make his rounds promoting the digital currency, CityCoins was worried the mayor’s statements would run afoul with federal regulators. According to emails from October 2021 obtained by Quartz, a CityCoins press representative requested the mayor undergo communications “training 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,” the email read. “There are a few regulatory wires the mayor has tripped in recent interviewed and it’s really important for the sustainability of the project that he is better prepared.”
During an interview with cryptocurrency news site CoinDesk in November 2021, Suarez said the digital currency had already generated $21 million for the city. He then announced the city would stake some of that sum in bitcoin to hand out a dividend to each resident. (The plan has yet to come to fruition.)
“We are going to create a digital wallet for our residents,” Suarez said. “We’re going to give them bitcoin directly from the yield of MiamiCoin.”
Another CityCoins-based token, NYCCoin, emerged under pro-crypto, New York City Mayor Eric Adams, who pledged to take his first paychecks in bitcoin. Like MiamiCoin, the value of NYC-branded coin has steadily declined. There were also discussions about launching AustinCoin or ATXCoin in honor of the Texas capital.
The City of Miami received its first donation from CityCoins, a $5.25 million sum, in early February 2022, cashing out shortly before a cryptocurrency market plunge. The city commission voted to allocate the funds to a new rental assistance program.
As MiamiCoin’s value descended soon thereafter, Suarez did not appear as confident as he previously was about the future of the Miami-inspired token. At that time, the coin was sitting at around four-tenths of a cent. The mayor told the Miami Herald he was not sure if “it’s going to work or not,” a stark contrast from his stance a few months earlier.
By September 2022, the coin’s value had dropped more than 99 percent from its peak. As of Thursday afternoon, March 16, it was trading at less than three one-hundredth of a cent.
