Lobbying Surge: U.S. Crypto Firms Allocate Nearly $19 Million in Lobbying Expenditures during the Initial Three Quarters of 2023, Poised for a Record-Breaking Year

Continued Advocacy Efforts: U.S. Crypto Firms, Including FTX, Maintain Lobbying Momentum with Nearly $22 Million Expenditure in the Previous Year

The cryptocurrency sector is poised to set a new milestone in federal lobbying expenditures, as firms within the industry intensify efforts to reshape their public image and advocate for favorable legislative measures. According to data furnished to Reuters by the nonprofit research group OpenSecrets, cryptocurrency companies collectively invested $18.96 million (approximately Rs. 158 crore) in federal lobbying during the first three quarters of 2023, surpassing the $16.1 million (approximately Rs. 134 crore) spent during the corresponding period in 2022. Notably, this upward trajectory persisted despite the notable setback last year when FTX, a prominent crypto exchange, faced a spectacular meltdown.

In the preceding year, which witnessed the industry grappling with reputational challenges, crypto companies, including FTX, dedicated a substantial sum of nearly $22 million (approximately Rs. 183 crore) towards lobbying efforts. Coinbase, the largest cryptocurrency exchange in the United States, emerged as the leading spender once again, allocating $2.16 million (approximately Rs. 18 crore). Following closely were Foris DAX, the operator of Crypto.com, the Blockchain Association, and Binance Holdings. This ongoing surge in lobbying expenditure underscores the industry’s commitment to influencing regulatory frameworks and fostering a conducive environment for its continued growth and development.

“Our goal is to engage directly with policymakers, build relationships and bridge the education gap to build a commonsense regulatory framework,” said Kristin Smith, CEO of the Blockchain Association, in a statement.

Crypto companies have been expanding in Washington, in part to try to mend their reputations following a string of scandals last year, including the collapse of FTX, whose former CEO Sam Bankman-Fried had been a familiar presence in Washington. He was found guilty of fraud last month by a jury in a Manhattan federal court.

Crypto firms have also been trying to combat growing regulatory scrutiny, especially from the US Securities and Exchange Commission which says the industry has been flouting its rules. Lobbying escalated after the SEC sued Coinbase and Binance in June for allegedly failing to register tokens, claims they deny.

Crypto companies have also been trying to advance friendly legislation in the House of Representatives and scored a victory in July when a congressional committee in that chamber passed two major bills that lobbyists say would help provide clarity over which existing financial rules apply to crypto companies.

Although those bills have yet to advance further, crypto lobbyists are not letting up. Coinbase, which in September launched a grassroots advocacy campaign, is continuing its push with more lawmaker meetings in coming weeks, a spokesperson said.Binance and Crypto.com did not respond to requests for comment.