The cryptocurrency industry is poised to break records in federal lobbying spending for 2023, with companies spending $18.96 million in the first three quarters. This surpasses the $16.1 million spent during the same period in 2022, approaching the total of nearly $22 million spent in the previous year.
The increased lobbying efforts come as the cryptocurrency industry grapples with reputational challenges and regulatory scrutiny. Last year’s collapse of FTX, a top lobbying spender, prompted firms to actively engage in reputation management and legislative advocacy.
Sam Bankman-Fried (SBF), former CEO of FTX, had been a key figure in lobbying efforts. Despite FTX’s collapse in 2022, SBF has remained active, advocating for cryptocurrency legislation and spending on lobbying initiatives.
Leading the pack in lobbying spending is Coinbase, the largest U.S. cryptocurrency exchange, contributing $2.16 million. Other significant spenders include Foris DAX (operator of Crypto.com), the Blockchain Association, and Binance Holdings.
Binance has significantly increased its lobbying spending, investing over $1 million in 2023. Binance Holdings invested $850,000, and Binance US spent $340,000, reversing the dynamics from 2022.
Kristin Smith, CEO of the Blockchain Association, emphasised the industry’s objective to engage directly with policymakers, build relationships, and bridge the education gap to establish a sensible regulatory framework.
The U.S. Securities and Exchange Commission (SEC) has heightened regulatory scrutiny, accusing the industry of flouting its rules. Lawsuits against Coinbase and Binance in June for alleged failure to register tokens have become focal points for lobbying efforts.
Cryptocurrency companies are also pushing for SEC approval of a spot Bitcoin exchange-traded fund (ETF).
Optimism surrounding this approval, following the SEC’s loss in a key court battle, contributed to Bitcoin reaching a 20-month high.
The industry celebrated a legislative victory in July when a congressional committee passed two bills aiming to provide clarity on financial regulations for crypto companies. Despite limited progress, lobbying efforts persist, with Coinbase intensifying its advocacy, launching a grassroots campaign, and planning additional lawmaker meetings.