In the first three quarters of 2023, Crypto companies collectively spent $18.96M on lobbying efforts
The cryptocurrency industry is gearing up to break its record for federal lobbying spending, with companies strategically allocating resources to engage policymakers and influence regulatory frameworks. Despite facing reputational challenges and increased regulatory scrutiny, cryptocurrency firms are intensifying their efforts in Washington, as revealed by data from the nonprofit research group OpenSecrets. In this article, we delve into the numbers, major players, and the evolving landscape of crypto lobbying.
In the first three quarters of 2023, cryptocurrency companies collectively spent $18.96 million on lobbying efforts. This marks a notable increase from the $16.1 million spent during the same period in 2022. The industry’s determination to actively participate in shaping regulatory policies remained steadfast, even in the aftermath of significant events, such as the high-profile collapse of FTX, a top-ten spender in the previous year.
Key Players in Lobbying
Leading the pack once again, Coinbase (COIN.O), the largest U.S. crypto exchange, invested $2.16 million in lobbying. Notable contributors included Foris DAX, the operator of Crypto.com, the Blockchain Association, and Binance Holdings. The Blockchain Association’s CEO, Kristin Smith, emphasized the industry’s commitment to engaging with policymakers to establish a commonsense regulatory framework.
Cryptocurrency companies, especially those caught in last year’s controversies, have been strategically expanding their presence in Washington. This expansion serves a dual purpose: rebuilding reputations and addressing regulatory concerns. By engaging directly with policymakers, these firms aim to bridge knowledge gaps and foster a better understanding of the crypto space.
Regulatory Scrutiny and Legal Battles
Growing regulatory scrutiny, particularly from the U.S. Securities and Exchange Commission (SEC), has prompted crypto firms to intensify their lobbying efforts. The SEC’s allegations of rule violations against major platforms like Coinbase and Binance have triggered legal battles and a subsequent surge in lobbying activities. The industry is pushing for regulatory clarity and has been actively challenging the SEC’s claims.
A significant focus of lobbying efforts has been directed toward securing approval for a spot bitcoin exchange-traded fund (ETF). The potential approval of such an ETF, capable of attracting millions of new investors, has heightened optimism within the industry. This optimism was further fueled when the SEC, after facing a legal setback, witnessed bitcoin reaching a 20-month high.
Legislative Victories and Ongoing Initiatives
Despite the industry facing headwinds, there have been legislative victories. In July, a congressional committee passed two bills seen as providing clarity on the application of existing financial rules to crypto companies. While these bills await further progress, crypto lobbyists, including Coinbase, are maintaining their momentum. Coinbase, for instance, continues its advocacy campaign with additional lawmaker meetings in the upcoming weeks.
The cryptocurrency industry’s lobbying surge in Washington reflects a concerted effort to actively shape regulatory landscapes and promote favorable legislation. As major players invest millions in lobbying, the evolving dynamics between crypto firms and regulators will continue to influence the industry’s trajectory. Whether navigating legal challenges, pursuing legislative victories, or advocating for an ETF, the crypto industry’s lobbying endeavors remain a pivotal force in its ongoing narrative.