Crypto Companies Step Up Spending on Lobbying in 2023

Lobbying Is Not Cheap

Several adverse events hit the crypto sphere in 2022, with the FTX downfall having a seismic effect, motivating regulatory agencies to increase their scrutiny of the industry. However, the industry is not collapsing, nor is it retreating, but is going on the offensive by increasing lobbying on Capitol Hill.

Securing friendly legislation is not cheap. Numbers clearly illustrate the ramping up of spending for lobbying. The trend started in 2017 when, from today’s perspective, a modest $200,000 was allocated for buying support from lawmakers. The following year, $920,000 became available for educating policymakers, and the amount rose by $3 million for the period of 2020 and 2021.

The crypto industry is poised to achieve a new record in 2023 for spending on federal lobbying. Coinbase is the top spender in 2023, with $2.16 million allocated to secure political capital in Washington. Some other companies’ increasing efforts to change the attitude of political elites are Foris DAX, Binance Holdings, and the Blockchain Association.

Companies are trying to foster relationships and engage with policymakers. According to Kristin Smith, chief executive officer of the Blockchain Association, the goal is to bridge the education gap and create a commonsense regulatory framework.

Crypto Advocacy Will Continue

Crypto firms are actively working on navigating increased regulatory scrutiny. The U.S. Securities and Exchange Commission is trying to make an example of the industry’s leaders, Binance and Coinbase, claiming various irregularities. Not surprisingly, these companies are taking the lead in crypto advocacy.

The industry is working on promoting friendly legislation in the House of Representatives, with two major bills passed this year, which can offer clarity for financial rules applicable to crypto companies. Crypto lobbyists are continuing to push for more engagement with lawmakers.