US Crypto Lobby Sets Pace for Record Spending in 2023

• The cryptocurrency industry in the United States spent a record $18.96 million in the first three quarters of 2023 on lobbying.
• The industry is lobbying for approval of a spot bitcoin exchange-traded fund (ETF) by the SEC.
• Coinbase intensified its lobbying efforts with a grassroots advocacy campaign.

In a bid to shape regulatory landscapes and repair reputational damage, cryptocurrency companies in the United States have set a new record for federal lobbying spending. According to data from the nonprofit research group OpenSecrets, the industry spent a staggering $18.96 million in the first three quarters of 2023, surpassing the $16.1 million spent during the same period in 2022.

Despite facing challenges like the high-profile meltdown of crypto exchange FTX, which was among the top-ten spenders last year, the industry’s lobbying efforts remained robust. In 2022, companies, including FTX, collectively spent nearly $22 million on lobbying.

Leading the pack once again is Coinbase, the largest U.S. cryptocurrency exchange, which invested $2.16 million in lobbying efforts. Other major contributors include Foris DAX, operator of Crypto.com, the Blockchain Association, and Binance Holdings.

Kristin Smith, CEO of the Blockchain Association, emphasized the industry’s goal to engage directly with policymakers, build relationships, and bridge the education gap to establish a sensible regulatory framework.

The surge in lobbying activities coincides with the crypto industry’s expansion in Washington. Firms have been working to mend their reputations following a series of scandals, including the collapse of FTX. The former CEO of FTX, Sam Bankman-Fried, was recently found guilty of fraud.

Regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC) has intensified, with accusations that the industry is flouting rules. The SEC sued Coinbase and Binance in June for allegedly failing to register tokens, sparking increased lobbying efforts to combat regulatory challenges.

One key focus of the industry’s lobbying is the approval of a spot bitcoin exchange-traded fund (ETF) by the SEC. Optimism in the wake of a key court victory in the summer has driven bitcoin to a 20-month high. Lobbyists continue to press for approval, viewing it as an opportunity to open up the world’s largest cryptocurrency to millions of new investors.

While the industry celebrated a victory in July when a congressional committee passed two bills offering clarity on financial rules for crypto companies, further progress is awaited. Coinbase, in particular, has intensified its efforts with a grassroots advocacy campaign, including ongoing meetings with lawmakers in the coming weeks.

As the cryptocurrency industry navigates a complex regulatory landscape, the substantial increase in lobbying spending underscores its commitment to influencing policy decisions and securing a favorable environment for continued growth.

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