The cryptocurrency industry has seen a significant increase in lobbying efforts in Washington, with a record-breaking $18.96 million spent in federal lobbying during the first three quarters of 2023. This surpasses the $16.1 million spent during the same period in 2022, according to data from nonprofit research group OpenSecrets (Reuters).
Despite the high-profile collapse of the crypto exchange FTX last year, which was previously among the top ten lobbying spenders, the industry as a whole has continued to invest heavily in influencing policymakers. In 2022, crypto companies, including FTX, collectively spent nearly $22 million on lobbying efforts.
Leading Players in Cryptocurrency Lobbying
One of the prominent players in cryptocurrency lobbying is Coinbase, the largest cryptocurrency exchange in the United States. Coinbase has once again topped the list by spending $2.16 million on lobbying. Other notable spenders in the industry include Foris DAX, the operator of Crypto.com, the Blockchain Association, and Binance Holdings.
“Our goal is to engage directly with policymakers, build relationships, and bridge the education gap to build a commonsense regulatory framework,” said Kristin Smith, CEO of the Blockchain Association.
The increased presence of cryptocurrency companies in Washington can be seen as part of their efforts to mend their reputations following a series of scandals in the past year. One significant incident was the collapse of FTX, whose former CEO, Sam Bankman-Fried, had a noticeable presence in Washington. Recently, Bankman-Fried was found guilty of fraud in a Manhattan federal court.
In addition to reputation management, crypto firms are also facing heightened regulatory scrutiny, particularly from the U.S. Securities and Exchange Commission (SEC) accusing the industry of non-compliance with its rules. The SEC’s lawsuits against Coinbase and Binance in June, alleging failure to register tokens, have become focal points for the industry’s lobbying efforts.
Advocating for Regulatory Progress and Approval
The cryptocurrency industry has been advocating for the SEC’s approval of a spot bitcoin exchange-traded fund (ETF). The approval of such an ETF would open doors for millions of new investors to access the world’s largest cryptocurrency. Recent optimism surrounding this possibility, fueled by the SEC’s loss in a key court battle over the matter in the summer, has propelled Bitcoin to a 20-month high.
Crypto companies have also been working towards advancing legislation in the House of Representatives. In July, they celebrated a victory as a congressional committee passed two significant bills aimed at providing clarity on which existing financial regulations apply to crypto companies. Though further progress is required for these bills to become laws, crypto lobbyists remain determined in their efforts.
Furthermore, Coinbase, in its advocacy efforts, launched a grassroots advocacy campaign in September, scheduling meetings with lawmakers in the coming weeks. In August, the platform also launched the Stand with Crypto Alliance, an independent nonprofit organization tasked with mobilizing support for legislation that would create a regulatory framework for digital assets in the US.
