The cryptocurrency sector appears poised to record a new high in federal lobbying expenditures, as crypto companies look to mend their image and promote supportive legislation, according to statistics disclosed to Reuters by the nonprofit research entity OpenSecrets. In the initial three quarters of 2023, cryptocurrency companies allocated $18.96 million toward lobbying efforts, contrasting with the $16 million expended during the corresponding period last year. This expenditure continued despite the notable collapse of the biggest cryptocurrency exchange at the time, FTX, which was among the top 10 spenders the year before.
Last year organizations such as FTX spent about $22 million on lobbying. The biggest cryptocurrency exchange in the United States, Coinbase (COIN.O), led the pack with a $2.16 million donation, followed by the Blockchain Association, Binance and Foris DAX, the company that runs Crypto.com. Blockchain Association CEO Kristin Smith emphasized the objective of engaging directly with lawmakers to construct relationships and address the knowledge gap, ultimately establishing a rational regulatory framework.
To refurbish their standing, crypto companies have extended their presence in Washington; this focus was prompted by a series of scandals in the past year, including the collapse of FTX. The company’s former CEO, Sam Bankman-Fried, a familiar figure in Washington, was recently convicted of fraud in a Manhattan federal court.
These companies have also been actively countering mounting regulatory scrutiny, particularly from the United States Securities and Exchange Commission (SEC), which alleges noncompliance with its regulations. Lobbying activities intensified following SEC lawsuits against Binance and Coinbase in June; the lawsuits accused the companies of not registering tokens as securities, an assertion both firms deny.
Additionally, the industry is lobbying the SEC for approval of a spot bitcoin ETF. The excitement surrounding the likelihood of approval, following the agency’s setback in a recent key court case, contributed to Bitcoin reaching a 19-month peak this week. Bitcoin, which is currently worth about $38,812 and is experiencing a 1.6% rise, has been on an upward trend since October.
Seeking favorable legislative developments, cryptocurrency companies have been making headway in the House of Representatives. In July, they achieved success when a congressional committee approved two significant measures aimed at providing clarification on the application of the current financial regulations to cryptocurrency firms.
Although these bills await further progression, crypto lobbyists remain persistent. Coinbase, which initiated a grassroots advocacy campaign recently, continues its efforts with additional meetings with lawmakers in the upcoming weeks, according to a spokesperson.
Companies such as Riot Blockchain Inc. (NASDAQ: RIOT) hope that a stable regulatory structure is established for the crypto industry so that all players are certain about the rules they are expected to follow in the coming months and years.
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