The cryptocurrency industry is on track to set a new record for federal lobbying spending in 2023. According to data from OpenSecrets and reported by Reuters, a nonprofit research group, crypto companies have already spent $18.96 million on lobbying in the first three quarters of the year. This figure surpasses the $16.1 million spent during the same period in 2022 and is approaching last year’s total of nearly $22 million.
The increase in lobbying efforts comes in the wake of several high-profile scandals and regulatory challenges faced by the industry. Notably, the collapse of the crypto exchange FTX, a top-ten spender in lobbying last year, has prompted firms to actively engage in reputation management and legislative advocacy.
Leading the lobbying expenditure is Coinbase, the largest U.S. crypto exchange, which has spent $2.16 million. Other significant spenders include Foris DAX, the operator of Crypto.com, the Blockchain Association, and Binance Holdings.
Navigating regulatory challenges and SEC scrutiny of crypto
Kristin Smith, CEO of the Blockchain Association, emphasized the importance of direct engagement with policymakers to bridge the education gap and establish a sensible regulatory framework. This sentiment reflects the industry’s broader strategy to navigate the increasingly complex regulatory landscape.
The industry’s lobbying efforts have intensified particularly in response to actions by the U.S. Securities and Exchange Commission. The SEC has accused the sector of flouting rules and sued Coinbase and Binance for allegedly failing to register tokens, claims both companies deny.
Another key focus for crypto lobbyists has been the push for the SEC to approve a spot Bitcoin exchange-traded fund. The optimism surrounding this potential approval, especially after a key court ruling in the summer, contributed to Bitcoin reaching a 20-month high on today.
In Congress, the industry scored a legislative victory in July when a House committee passed two major bills aimed at providing clarity on the application of existing financial rules to crypto companies. While these bills have not progressed further, lobbying efforts continue unabated.
Coinbase, in particular, has ramped up its advocacy efforts, launching a grassroots campaign in September and planning more lawmaker meetings in the coming weeks.
As the cryptocurrency industry navigates a challenging regulatory environment and seeks to repair its public image, its increased investment in lobbying signifies a strategic effort to shape policy and regulation in its favor.
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