The cryptocurrency industry in the United States is on pace to achieve a historic high in federal lobbying expenditures, following a year in which companies sought to rebuild their public image and advocate for favorable legislation, as per data shared with Reuters by the nonprofit research group OpenSecrets.
In the initial three quarters of 2023, crypto companies dedicated $18.96 million (approximately Rs. 158 crore) to lobbying efforts, marking an increase from the $16.1 million (roughly Rs. 134 crore) spent during the corresponding period in 2022. This upward trajectory persisted despite the significant setback experienced by FTX, a major crypto exchange, in the previous year. In 2022, including FTX, companies collectively spent nearly $22 million (roughly Rs. 183 crore) on lobbying.
Leading the charge once again was Coinbase, the largest U.S. crypto exchange, which invested $2.16 million (approximately Rs. 18 crore). Following closely were Foris DAX, the operator of Crypto.com, the Blockchain Association, and Binance Holdings.
Kristin Smith, CEO of the Blockchain Association, stated, “Our goal is to engage directly with policymakers, build relationships, and bridge the education gap to build a commonsense regulatory framework.”
The expansion of crypto companies into Washington reflects their efforts to rehabilitate their reputations in the aftermath of numerous scandals in the previous year, including the collapse of FTX. The former CEO of FTX, Sam Bankman-Fried, was recently found guilty of fraud by a Manhattan federal court.
Intensifying regulatory scrutiny, particularly from the U.S. Securities and Exchange Commission (SEC), has also driven crypto firms to ramp up lobbying efforts. This surge followed lawsuits filed by the SEC against Coinbase and Binance in June, alleging non-compliance with registration rules, allegations that both companies deny.
Crypto firms are also advocating for the SEC’s approval of a spot bitcoin exchange-traded fund (ETF), a move that could broaden access to the world’s largest cryptocurrency for millions of investors. Optimism surrounding the potential approval, coupled with a key court ruling in the summer, contributed to bitcoin reaching a 20-month high on Monday.
Despite a congressional committee passing two significant bills in July, aiming to bring clarity to the application of existing financial rules to crypto companies, further legislative progress remains pending. However, crypto lobbyists, including Coinbase, continue their advocacy efforts, with ongoing lawmaker meetings in the weeks ahead. Binance and Crypto.com did not respond to requests for comment.
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