At Tuesday night’s City Council meeting, the Council voted unanimously to move forward with creating a “Santa Monica Bitcoin Office” with the help of non-profit Proof of Workforce headed by former Santa Monica firefighter’s union president Dominick Bei.
The motion was brought by Vice Mayor Lana Negrete who noted that Proof of Workforce is not charging the city for the work it is doing and sees only upside for the city.
The purpose of the Bitcoin Office will be four-fold:
- Bitcoin education for Santa Monica residents, students, businesses and workforce;
- Identify and facilitate Bitcoin initiatives/partnerships that support Santa Monica’s economic recovery and cultivate economic growth, while attracting a global Bitcoin Conference and tourism industry;
- Identify remote and local career opportunities for Santa Monica residents and students; and
- Explore the potential of utilizing stranded city generated renewable energy to explore environmentally neutral bitcoin mining.
It was the first point that raised concerns with two Councilmembers.
First, Councilmember Gleam Davis warned that if the city is seen as promoting Bitcoin it could be liable – or if not liable still find itself on the defensive in lawsuits – should residents invest in the crypto-currency and lose money.
“A lot of people have made money in Bitcoin, but a lot of people have lost money in Bitcoin,” Davis commented.
Negrete and City Attorney Doug Sloan assured Davis that an appropriate disclaimer and indemnification document would be created that attendees of the city’s educational events would have to sign.
Councilmember Caroline Torosis also held up the final vote with concerns that the city should not be seen as promoting one investment (Bitcoin) over another. Negrete responded by joking that the people doing the educational event could wear t-shirts encouraging people not to buy Bitcoin.
All jokes aside, there is good reason for concern that the city could end up promoting and hosting events that are designed to get people or organizations to invest in Bitcoin.
As mentioned, Proof of Workforce is run by Bei, a local firefighter captain and former president of the union. Under his leadership, Bei led the union in being the first in the country to not just invest in, but also control their own, crypto investments. He has leveraged this experience into a reputation as an expert in leading organizations into investing in Bitcoin. In recent months:
- Bei was featured in the podcast “Coin Stories” where he proclaimed that “Every Pension Fund, Union and Worker Will Adopt Bitcoin” according to the episode’s title.
- His bio for an upcoming Bitcoin conference states that he has “embarked on a mission to orange-pill the blue collar world!” An op/ed in Bitcoin Magazine (where Bei is a sometimes-author), explains that there isn’t a firm definition of “orange pilling” someone but that every definition includes promotion of Bitcoin as a firm investment choice.
- Proof of Workforce, in the first sentence on their “about page” states that, “Proof of Workforce is a non-profit dedicated to long term, education-based Bitcoin adoption.”
And while Proof of Workforce is not charging the city for these services, that contract raises different questions. As a new 501c(4) non-profit, Proof of Workforce hasn’t had to report their donor lists. So if the city isn’t paying for the work Proof of Workforce will be doing, who (if anyone) is?
Does this mean that Bei or Proof of Workforce will be unable to follow the city’s intents and directives about educational events that don’t encourage people to purchase Bitcoin? No. It doesn’t. But it does suggest that the city needs to be very clear about what does, and doesn’t, happen at events that they are sponsoring through the Office of Bitcoin.
In November of 2023, Negrete traveled to El Salvador, the first country to officially embrace Bitcoin as part of its official currency to learn more about how the currency has impacted their economy. For its part, El Salvador has been praising Santa Monica for taking steps to embrace Bitcoin on its social media.
In the Tuesday meeting, Negrete offered that even opening an Office of Bitcoin would create good press for the city and it has. “This Resort Town In California Launched US’ First Official Bitcoin Office After Taking Inspiration From Nayib Bukele’s Pro-BTC Country El Salvador,” blared Yahoo Finance. “The City of Santa Monica has partnered with Proof of Workforce to establish a Bitcoin Office for its residents. Bitcoin is Making America Great Again!” declared Bitcoin TV. “The City of Santa Monica just announced that it’s living up to its ‘legacy as Silicon Beach.’” announced Crypto News.
Negrete also hopes this good press will bring more conferences and other crypto style businesses to the city. In October, the city will host “The Pacific Bitcoin Festival,” where enthusiasts from around the world will come to the city. She hopes some of them will decide to stay and invest.
“Much like fans of Star Wars, they bring people from all over the world in ways I’ve never seen before,” she commented.
While the move passed by acclamation, there was question over conflict of interest as family members of Councilmembers Oscar de la Torre and Christine Parra (both of whom incidentally were on the trip to El Salvador last year with Negrete) have invested in crypto currency.
Full disclosure: The California Streets Initiative, the non-profit that publishes Santa Monica Next has received donations of Bitcoin, although the last one was over a decade ago. Our current Bitcoin holdings are less than $2,000.
