The cryptocurrency industry faced something of a public image crisis due to the tumultuous events of 2022, ranging from the infamous collapse of the Terra (LUNA) ecosystem in May to the staggering and sudden downfall of FTX in November. Despite these adverse events, the industry is very much alive to this day and has, this year, gone through a period of recovery.
Still, regulatory pressure remains high, and various government agencies are keeping a close eye on various cryptocurrency companies – as was made evident by Binance’s recent $4 billion settlement and the removal of Changpeng Zhao as the crypto exchange’s CEO.
With these factors considered, it is not surprising that the industry as a whole has only stepped up its lobbying efforts in Washington. In the first three quarters of 2023, various actors in the crypto industry have spent nearly $19 million in this offensive to bring U.S. politicians over to their side, per a Reuters report published on December 5.
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Crypto lobbying over the years
While the amount of money spent on lobbying in 2023 might appear at first as a direct reaction to the events of the previous year, the fact is that these efforts have been increasing steadily over the years – along with the growth of the entire cryptocurrency industry.
Between 2017 and 2018, the amount spent on lobbying shot up from $200,000 to $920,000. In the following years, the figures continued increasing and, for example, more than doubled between 2020 and 2021 and rose by approximately $3 million.
Last year, despite being widely regarded as the “crypto winter,” also saw a significant increase as the total amount spent by the crypto industry on lobbying totaled $21.6 million. This year, the amount is again poised to set a new record as the first three quarters saw $18.96 million spent in Washington – a notable increase from $16.1 million in the same period a year before.
Due to the inherently problematic nature of lobbying, it is hard to gauge its exact effects, but it seems apparent that it has gained the crypto industry some backers in the federal government – especially as an increasing number of elected officials are choosing to invest in cryptocurrencies.
Some notable examples include the SEC Commissioner Hester Peirce – known for going against her agency’s crypto-targeting actions and for supporting the approval of a stop Bitcoin exchange-traded fund (ETF) – and Representative Tom Emmer – known for criticizing the SEC, both for attempting to go after FTX’s Sam Bankman-Fried and later for failing to go after Bankman-Fried earlier.
A closer look at crypto lobbying in 2023
When taking a closer look at the contributions of individual entities to the wider Washington drive, several major players emerge. Coinbase (NASDAQ: COIN), the largest publicly traded cryptocurrency exchange in the U.S., is at the very top of the list as it has – by the end of this year’s third quarter – spent $2.16 million.
This figure is in line with Coinbase’s previously expressed goal of bringing regulatory clarity to the wider cryptocurrency industry. Other major contributors include Foris DAX, the company behind Crypto.com, Blockchain Association – a crypto advocacy group – and Binance.