US crypto industry lobbying spending breaks record in 2023

According to figures provided by nonprofit research group OpenSecrets, the cryptocurrency industry in the United States broke records for lobbying spending in 2023. Despite reputational challenges and the collapse FTX exchange, crypto companies spent $18.96 million on lobbying activities in the first three quarters of 2023, compared to $16.1 million in the same period in 2022. The first is Coinbase, the largest cryptocurrency exchange in the United States, which spent 2.16 million USD on campaign work. Other big spenders include Foris DAX, which operates Crypto.com, the Blockchain Association and Binance Holdings.

The purpose of these lobbying efforts is to engage directly with policymakers, build relationships and bridge knowledge gaps to establish the appropriate regulatory framework for the industry. Cryptocurrency companies are expanding their presence in Washington as they seek to restore their reputation after a series of scandals last year. This includes the collapse of FTX and the indictment of former FTX CEO Sam Bankman-Fried for fraud.

Furthermore, the industry is facing increasing scrutiny from regulators, especially the US Securities and Exchange Commission (SEC). The agency accused the cryptocurrency companies of violating US securities laws. Lobbying efforts have increased sharply since the SEC sued Coinbase and Binance in June for allegedly failing to register tokens with the agency before being sold.
A key industry goal is to receive SEC approval for a bitcoin spot exchange-traded fund (ETF). This will give millions of investors access to the largest cryptocurrency. Expectations increased after the SEC lost the case, leading to a spike in bitcoin prices. Cryptocurrency companies have also stepped up their advocacy for more favorable bills for the cryptocurrency market in the House of Representatives.
This past July, cryptocurrency companies scored a victory when a congressional committee passed two bills aimed at providing clarity on current financial regulations for cryptocurrency companies. Although these bills have not progressed further, lobbyists continue their efforts for now. For example, Coinbase launched a grassroots campaign in September and plans to hold more meetings with lawmakers in the coming weeks.
Overall, the cryptocurrency industry's growing lobbying spending reflects its determination to shape regulation and improve its reputation. As the industry continues to grow, companies remain committed to engaging with policymakers and advocating for a balanced regulatory framework that promotes innovation while protecting consumers.