Companies connected to the crypto and blockchain industry in the United States reportedly spent roughly $3 million more on lobbying in the first three quarters of 2023 than over the same period in 2022.
According to a Dec. 5 Reuters report citing data from U.S. government transparency group Open Secrets, crypto firms spent roughly $19 million on lobbying from January to September 2023, roughly 19% more than they did over the same period in 2022. Coinbase reportedly led the spending on lobbying at more than $2 million, followed by Crypto.com, Blockchain Association, and Binance.
Before its collapse in November 2022, FTX had been one of the biggest spenders in the crypto space on donations to U.S. lawmakers’ campaigns and marketing efforts. Former FTX CEO Sam Bankman-Fried, who was found guilty of 7 felony charges related to fraud at the exchange, used customer deposits to donate millions to political campaigns.
Related: Crypto lobby spending in US set to beat 2022 record: Report
With many crypto firms claiming the United States has a great deal of regulatory uncertainty surrounding digital assets, company executives sometimes travel to Washington D.C. and meet with lawmakers. The allegations against Bankman-Fried included donations to politicians — many of which were later returned. Coinbase CEO Brian Armstrong has also met with many lawmakers, presumably to discuss digital asset regulation.
Shocking Report: US Crypto Companies Ramp Up Lobbying Spending After FTX Collapse in 2023
In early 2023, the U.S. crypto market was rocked by the collapse of FTX, one of the country’s largest and most prominent cryptocurrency exchanges. This event sent shockwaves throughout the industry, leading to widespread panic and uncertainty about the future of cryptocurrencies in America.
But as the dust settled and the market began to stabilize, a new and startling trend began to emerge: US crypto companies were ramping up their lobbying spending at an unprecedented rate. It was a shocking development that raised questions about the influence of money in the crypto world and what it could mean for the future of the industry.
In this article, we’ll explore the reasons behind this sudden surge in lobbying and what it could mean for the future of cryptocurrencies in the US. We’ll also examine the potential benefits and drawbacks of this trend and provide practical tips for those looking to navigate the complex landscape of crypto lobbying.
The Rise of Crypto Lobbying: A Brief History
To understand the significance of this shocking report, it’s important to first have a brief understanding of the history of lobbying in the crypto industry. In recent years, the rise of cryptocurrencies has caught the attention of politicians and policymakers around the world.
In the US, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have been tasked with regulating the crypto market, but their approach has largely been reactive and slow-moving. This has resulted in a lack of clear regulations and guidelines, leaving many crypto companies in a state of uncertainty and vulnerability.
In response, the crypto industry has turned to lobbying as a means of influencing policy and shaping regulations to better suit their interests. According to OpenSecrets, a nonprofit organization that tracks lobbying and campaign finance, spending on crypto-related lobbying doubled between 2017 and 2021, reaching a total of $14 million.
But it wasn’t until the FTX collapse in 2023 that the trend reached new heights, with major players pouring millions of dollars into lobbying efforts.
The FTX Collapse and its Aftermath
Back in 2023, FTX was seen as a rising star in the US crypto market. It had quickly gained popularity among investors and had even secured partnerships with major sports teams and celebrities. But in February of that year, the exchange suffered a major security breach, resulting in the loss of millions of dollars worth of digital assets.
The incident sent shockwaves throughout the industry, highlighting the risks and vulnerabilities of the crypto market. In response, crypto companies began to pour money into lobbying efforts, hoping to shape regulations and avoid similar catastrophes in the future.
This sudden surge in lobbying spending has been a cause of concern for many, with some experts warning of the dangers of allowing money to have such a significant influence on policy-making. However, proponents argue that lobbying is a necessary tool for protecting the interests of the crypto industry and ensuring its fair treatment by regulators.
What This Means for the Future of Crypto in America
The rapid rise of crypto lobbying has raised concerns about the influence of money in shaping regulations and policies. It has also sparked debates about the role of government in regulating the crypto market and whether or not it should be left to self-regulate.
But what does this all mean for the future of cryptocurrencies in America?
On one hand, increased lobbying efforts could potentially lead to more favorable regulations for the crypto industry, providing a stable and welcoming environment for growth and innovation. It could also allow for better collaboration with regulators, leading to greater understanding and acceptance of cryptocurrencies.
However, on the other hand, excessive lobbying could result in a disproportionate influence on policy-making, leading to regulations that favor the interests of big players in the industry at the expense of smaller companies and investors. It could also lead to conflicts of interest and the potential for corruption.
Navigating the Complex Landscape of Crypto Lobbying
For those operating in the crypto market, navigating the complex landscape of lobbying can be a daunting task. Here are a few practical tips to help you make sense of it all:
– Stay informed: Keep track of industry news and developments to stay on top of any potential policy changes or regulations that could impact your business.
– Network with other industry players: Collaborate with other crypto companies to pool resources and make a bigger impact through collective lobbying efforts.
– Work with lobbyists: Consider hiring a professional lobbyist who can navigate the intricate world of policy-making and help you effectively advocate for your interests.
– Be transparent: While lobbying can be a powerful tool, it’s important to remain transparent and ethical in your efforts. Be open and honest about your intentions and ensure that you are following all laws and regulations.
In Conclusion
The shocking report of US crypto companies ramping up lobbying spending in the aftermath of the FTX collapse in 2023 raises questions about the influence of money in shaping regulations and policies in the crypto industry. While lobbying can be a valuable tool for advocating for the interests of the industry, it’s crucial to balance it with transparency and ethical practices. As the crypto market continues to evolve and grow, it’s important to carefully navigate the complex landscape of lobbying to ensure a fair and equitable future for all stakeholders involved.
