Cryptocurrency Industry Sets Lobbying Spending Record Amid Regulatory Challenges
The cryptocurrency industry is poised to set a new record for federal lobbying spending, with firms investing $18.96 million in the first three quarters of 2023, compared to $16.1 million during the same period in 2022, according to data from nonprofit research group OpenSecrets. Despite last year's notable setbacks, including the FTX exchange meltdown, which had been a top-ten spender, companies are actively engaging in lobbying efforts. Coinbase led the spending, allocating $2.16 million, followed by Foris DAX (Crypto.com operator), the Blockchain Association, and Binance Holdings.
Kristin Smith, CEO of the Blockchain Association, emphasized the industry's goal of establishing relationships with policymakers and fostering understanding to create a sensible regulatory framework. In response to scandals and increased regulatory scrutiny, crypto companies are expanding their presence in Washington, aiming to repair reputations and address issues raised by the U.S. Securities and Exchange Commission (SEC). Last year, FTX's former CEO Sam Bankman-Fried, a familiar face in Washington, was found guilty of fraud.
Lobbying efforts intensified after the SEC sued Coinbase and Binance in June for alleged failure to register tokens, allegations both companies deny. The industry is also pushing for SEC approval of a spot bitcoin exchange-traded fund (ETF) to broaden cryptocurrency access. Optimism regarding potential approval, following the SEC's summer court defeat, contributed to bitcoin reaching a 20-month high.
Crypto companies seek supportive legislation in the House of Representatives, achieving success in July with two bills passed by a congressional committee. Although awaiting further advancement, industry lobbyists, including Coinbase, remain active. Coinbase, which launched a grassroots advocacy campaign in September, plans to continue engaging lawmakers in the coming weeks.