American crypto lobby expected to break spending records in 2023
After a series of unfortunate occurrences in 2022—including the May collapse of the Terra (LUNA) ecosystem and the November collapse of FTX—the cryptocurrency industry’s reputation took a hit. In spite of all these setbacks, the sector is thriving and even had a recovery phase this year.
According to Binance’s recent $4 billion settlement and the dismissal of Changpeng Zhao as the crypto exchange’s CEO, legal scrutiny is still intense, and several government agencies are closely monitoring various cryptocurrency enterprises.
Knowing these considerations, it’s not unexpected that the sector has significantly increased its lobbying efforts in Washington. According to a Reuters article published on December 5, several entities in the crypto business have invested about $19 million in this campaign to influence legislators in the United States during the first three quarters of 2023.
Although the budget for lobbying in 2023 may seem like a direct response to last year’s events, the truth is that these efforts have been growing consistently over the years, just like the cryptocurrency business as a whole.
The number of dollars spent on lobbying increased dramatically, from $200,000 in 2017 to $920,000 in 2018. The numbers kept going up in the years that followed; for instance, they increased by around $3 million and more than quadrupled in 2021 compared to 2020.
Despite the fact that last year was often known as the “crypto winter,” the crypto business nonetheless managed to spend a whopping $21.6 million on lobbying. Spending in Washington increased significantly to $18.96 million in the first three quarters of this year from $16.1 million in the same time last year, putting the sum on track to establish a new record once again.
Lobbying is inherently problematic, so its precise impacts are impossible to measure. However, it seems that the crypto business has earned some supporters in the federal government, particularly as more and more elected officials are investing in cryptocurrency.
Notable figures in this regard include Hester Peirce, a commissioner of the SEC, who opposed her agency’s crypto-targeting efforts and voted to approve a stop Bitcoin exchange-traded fund (ETF); and Emmer, a representative, who has criticized the SEC on multiple occasions, first for failing to investigate FTX’s Sam Bankman-Fried and then for trying to do so.