Courtney and Charlie Shrem. Photograph by Michael Kinsey.
I first met Charlie Shrem, 32, and his wife, Courtney, in an office that overlooks Sarasota Bay from the seventh floor of downtown’s Palm Tower Suites. It’s from here that Shrem runs Crypto.IQ, a consulting company that works with investors in cryptocurrencies like Bitcoin.
A decade ago, Shrem was one of the biggest names in crypto. In 2011, he founded BitInstant, one of the first cryptocurrency exchanges, and later helped launch the nonprofit Bitcoin Foundation. The Winklevoss twins, famous for their role in the development of Facebook with Mark Zuckerberg and the acrimonious breakup and lawsuit that followed, bought their first stake in crypto from Shrem. (According to Forbes, the twins are now both Bitcoin billionaires.) Thanks to crypto, Shrem’s official net worth grew to $500,000, a number that underestimates how wealthy he was, considering the amount of Bitcoin he owned. His life was a fantasy of luxury and tech celebrity.
“I walked around like my shit didn’t stink,” says Shrem. “I was 22, just out of college. I met Courtney. Life was grand. We owned a nightclub in Manhattan that we were living on top of.” Bitcoin was going for $1,000 a unit and rising.
“I did the very first transaction for Bitcoin to be accepted in a nightclub,” says Courtney. She showed me a picture from a Bloomberg article that shows her exchanging cryptocurrency for a cocktail.
The good times didn’t last long. In 2014, when he was 24, Shrem was arrested for aiding and abetting the operation of an unlicensed money transmitting business related to Silk Road, the now-defunct online black market. He spent a year in prison in Pennsylvania.
“My whole world came crashing down,” he says.
Courtney stuck it out with Shrem, abandoning an acting career in New York to move to Pennsylvania to be closer to him. After his release, traumatized by his incarceration and his fall from grace, Shrem moved into his mother-in-law’s basement with Courtney. He had no idea what to do next.
That’s when he came to Sarasota. In 2016, he visited the city after Courtney’s grandmother passed away and immediately decided this was where he wanted to live. He told Courtney, “Let’s never leave this place.” He proposed to her on Lido Beach.
Shrem says that at the time, there was no real crypto community in Sarasota to speak of. But then Shrem met Jesse Biter, a Sarasota entrepreneur who, at the time, ran a tech incubator called the HuB with Rich Swier. Biter had gotten interested in Bitcoin years earlier, and the HuB had begun accepting rent payments in Bitcoin.
“Jesse Biter has supported the tech community a lot,” says Shrem. “He basically didn’t charge me rent when I worked out of his building at the HuB.” (Biter calls Shrem a “superstar in the business.”)
Five years after moving to Sarasota, the Shrems have rebuilt their Bitcoin empire, and now own homes in Laurel Park and Lido Shores and on Bird Key. “Sarasota gave me the second chance that I needed,” says Shrem.
Crypto.IQ isn’t the only cryptocurrency operation based out of Palm Tower Suites, where I met Shrem for the first time. These days, nearly all seven floors of the building located at 1343 Main St. are filled with crypto entrepreneurs. In just a few short years, Sarasota, a place best known for its white sand beaches and its world-class arts scene, has become a destination and an incubator for some of the biggest players in the young and hungry Wild West of crypto.
A disclaimer: I cannot explain how Bitcoin works. I only vaguely understand what the blockchain is. I have no idea why people are paying millions of dollars for digital images of monkeys. No matter how many times people patiently try to educate me about the crypto world, my eyes glaze over like I’m back in high school, snoring through calculus class. I also wonder if it’s all one big multilevel marketing scheme.
But what I do know is that Florida is becoming one of the premier destinations for crypto culture. The mayor of Miami wants his city to be the capital of the cryptocurrency universe and is taking his government paycheck in Bitcoin. This past legislative session, only one Florida lawmaker voted against House Bill 273, a law that would undo a previous court ruling preventing individuals who own Bitcoin and other cryptocurrencies from selling them without a license. Byte Federal, a Venice-based company founded by Lee Hansen, Lennart Lopin and Mark Paolillo that manufactures Bitcoin ATMs, was recognized this year as the seventh-fastest growing company in the Southeast. You can find seven of its 1,300-plus ATMs in and around Sarasota.
It’s easy to see why Miami, with its reputation for ostentatious wealth and glamorous parties, is a draw for crypto investors, many of them young and suddenly flush with cash. The appeal of Sarasota, however, may be less obvious.
Robert Genito, 38, got rich mining Bitcoin in Sarasota. He moved here in 2010 to work as a software engineer for Clickbooth, the digital marketing company now known as Perform[cb]. At the time, Bitcoin was a niche online curiosity.
“When I got to Sarasota, I went balls to the wall mining Bitcoin because my girlfriend at the time didn’t move in with me right away,” says Genito. “I loaded the house up, used every single outlet, every single circuit, to draw as much power as possible.”
To mine Bitcoin is not to dig it up from the earth, but to have computers solve complex cryptographic equations that are then put on the blockchain, a visible, unchangeable list of records meant to show transactions. Each time someone solves an equation, he or she is given a single Bitcoin (or BTC). Only 21 million Bitcoins will ever be minted, and the equations get more complex with each one solved, requiring massive amounts of energy for computing power.
Bitcoin was meant to be a new form of currency, but it has turned into an asset akin to stocks. Some people refer to it as “digital gold.” Other metaphors are less kind. “Imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin,” one Twitter user opined.
imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin
— alcibiades nuts (@Theophite) August 16, 2018
Over time, Genito mined hundreds of millions of dollars’ worth of Bitcoin. When I spoke with him, he wore a deep blue Versace sweater and, under that, an embroidered Versace shirt. On his feet were Prada slip-ons. On one arm, he wore a giant gold watch; on the other, a Cuban link bracelet that looked an inch thick. Genito didn’t always dress this way. Even after he amassed a small fortune mining Bitcoin, he lived an austere life.
“I was so into hoarding Bitcoin, I didn’t have furniture in my first apartment,” he says. “Just a bed and little chaise thing.” It wasn’t until a little over a year ago that Genito started splurging. “I was programmed as a little kid to think you only needed one pair of shoes,” he says. “Then I got attracted to feeling uncomfortable in expensive things. I was like, ‘Whatever,’ and started buying a lot of Louis Vuitton, Gucci and Burberry.”
Although Genito considers himself retired, he says he still wants to add another zero to his net worth and become a billionaire. He owns a house in Lakewood Ranch and is continually adding to his car collection. He’s not sure how much longer he’ll stick around in Sarasota, but, in the meantime, he is convincing other people in the crypto world to come here.
“Anthony Di Iorio called me not long ago,” says Genito. Di Iorio is one of the cofounders of Ethereum, the second most popular cryptocurrency, just behind Bitcoin. “He said, ‘Hey, I’m looking to buy a place in Fort Myers.’ I said, ‘Dude, no, ugh. You saw some ad and you think Fort Myers is the shit. Do not go to Fort Myers. They call it Fort Misery for a reason.’ I told him to come to Sarasota.” (Di Iorio declined a request for an interview.)
I asked Genito how he sold his friend on Sarasota. “The beach, the art, the culture,” says Genito. “I told him that Sarasota allows itself to be more relaxed than a place like Fort Myers or Miami.” A week later, Di Iorio called Genito and said he was closing on a house in Lakewood Ranch, five minutes from Genito.
A big part of the appeal of crypto is that you can do it anywhere. In the same way that the Covid-19 pandemic encouraged white collar professionals to move to Florida and work remotely, it has also brought crypto investors to the Sunshine State.
“I think it picked up because of Covid,” says Charlie Shrem. “People always knew about this place because their grandparents lived here and they visited, so once offices let them work online, why would they go back to New York or California?”
But why Sarasota and not Miami or any of the other coastal cities in Florida competing for this new industry? Shrem likes how close Miami is. He no longer has to fly to San Francisco for meetings or conventions. But more than that, he likes that Sarasota wasn’t trying to convince him to move here.
“Sarasota isn’t a place looking for anyone,” he says. “Other places are trying to attract outsiders in. Sarasota was always comfortable with what it is.”
Shrem says local government officials like Sarasota City Commissioner Kyle Battie are also supportive. “If you have a question about something, the commissioners are very reachable,” he says. “Kyle is…