The landscape of the cryptocurrency industry is rapidly evolving, especially in the realm of federal lobbying. Crypto firms have significantly increased their lobbying expenditures. They aim to shape favorable legislation and mend their reputations amid various industry challenges.
Increased Lobbying Expenditures by Crypto Companies
In 2023, the cryptocurrency industry marked a notable uptick in lobbying spending. The total expenditure reached $18.96 million in just the first three quarters, surpassing the $16.1 million spent during the same period in 2022.
This increase in lobbying efforts comes despite the setbacks faced by the industry. That includes the dramatic collapse of the FTX crypto exchange, which was once a significant player in the lobbying arena.
Coinbase, the largest U.S. crypto exchange, is leading these lobbying efforts. They spent $2.16 million. Close behind are Foris DAX, operators of Crypto.com, the Blockchain Association, and Binance Holdings. Kristin Smith, CEO of the Blockchain Association, emphasizes their goal of engaging directly with policymakers to foster a commonsense regulatory framework.
Motivations Behind the Lobbying Surge
The expansion of crypto companies in Washington is partially driven by the need to repair their public image following various scandals. Sam Bankman-Fried, FTX’s former CEO, was recently found guilty of fraud. It further emphasizes the need to clean up the industry’s reputation.
Moreover, there is increased scrutiny from regulatory bodies like the U.S. SEC. It accuses the industry of non-compliance and has significantly motivated these firms to amplify their lobbying efforts.
A primary focus for these companies is combating regulatory challenges. The SEC’s legal actions against Coinbase and Binance over alleged unregistered tokens have been a critical concern. As expected, the move led to escalated lobbying efforts.
Additionally, the industry pushes for the approval of a spot Bitcoin exchange-traded fund (ETF). Such a vehicle would make Bitcoin accessible to a broader investor base. The optimism surrounding this potential approval, especially after a key court ruling, has positively influenced Bitcoin’s market value.
Legislative Wins and Ongoing Efforts
Crypto firms have also been targeting friendly legislation in the House of Representatives. A significant victory was achieved in July when a congressional committee passed two major bills. Those bills can provide clearer regulatory guidelines for crypto companies.
While these bills are still in the process of advancing, the lobbying efforts are far from over. For instance, Coinbase has initiated a grassroots advocacy campaign and plans more meetings with lawmakers in the coming weeks.
The cryptocurrency industry’s increased investment in federal lobbying signifies its growing influence. Plus, it illustrates the urgency to establish a stable regulatory environment.
Ongoing dialogues and legislative developments will determine how this dynamic sector integrates with the broader financial system.
