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Crypto Lobbying Rose Tenfold, But It’s Still Just Catching Up

Crypto Lobbying Rose Tenfold, But It’s Still Just Catching Up

DailyCoinDailyCoin2024/08/30 10:30
By:DailyCoin
  • Hundreds of full-time lobbyists now work for crypto firms. 
  • Crypto is just catching up to other industries in lobbying. 
  • US legislators have yet to create a framework for crypto. 

Lobbying has become one of the primary methods companies use to shape policy in their favor. This is particularly important for crypto companies, as US legislators have still not approved a comprehensive legal framework for digital assets. 

For this reason, the scale and intensity of crypto lobbying efforts have increased dramatically in recent years. Still, while other industries have employed the practice for decades, crypto is just catching up.

Crypto Lobbying Rose 1386% in Seven Years

Crypto lobbying efforts are increasingly ramping up. In 2023, crypto companies spent $40.42 million on lobbying activities, a 1386% rise from 2017. The rapid rise is seen in the fact that nearly 60% of the total spending occurred in the last two years. 

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Still, these figures don’t tell the whole story. For one, crypto lobbying efforts pale compared to those of other industries. Statista said total lobbying expenditures in 2023 reached a staggering $4.26 billion . This means that crypto lobbying represents less than 1% of total lobbying expenditures in the US.

Moreover, lobbying expenditures did not rise as much as the crypto industry did overall. For instance, from January 2017 to January 2024, Bitcoin rose from about $1000 to $44,000, representing a 4400% increase, more than three times the increase in lobbying. 

Crypto Firms Scramble to Secure Favorable Framework for Crypto

One reason crypto companies need lobbying is that the US still lacks a comprehensive regulatory framework for digital assets. Without such a framework, regulatory uncertainty discourages investors and entrepreneurs from getting involved in the industry. 

Additionally, the current approach of the U.S. Securities and Exchange Commission, which applies existing securities laws to crypto, is seen as overly restrictive. Critics, including SEC Commissioner Hester Peirce , believe these regulations are inadequate for decentralized digital assets. If the legislators created a different framework for digital assets, the SEC would have to follow it. This is why crypto firms have a strong incentive to lobby. 

Major Players Shaping Crypto Lobbying

Apollo Global Management was in the lead in 2023, spending $7.56 million on lobbying. The company, which operates a crypto-focused arm called Apollo Crypto, employed 104 lobbyists, including 78 revolvers—former public sector employees working in the private sector.

Managed Funds Association (MFA), representing major alternative asset managers interested in cryptocurrencies, followed closely with $4.11 million in lobbying expenditures. MFA employed 32 lobbyists, 25 of whom were revolvers. 

Coinbase , one of the largest crypto exchanges, also dramatically increased its lobbying efforts, spending $2.86 million in 2023—a 3475% increase since 2017. 

On the Flipside

  • In May, the first major crypto bill passed through the House of Representatives. Supporters called the FIT21 bill the first step to creating a regulatory framework for digital assets. 
  • In December 2023, Senator Elizabeth Warren criticized crypto lobbying , particularly the use of revolvers. 

Why This Matters

As crypto lobbying efforts intensify, they highlight the need for a comprehensive regulatory framework in the U.S. Without clear regulations, the crypto industry faces continued uncertainty, hurting innovation and investment. 

Read more about criticism of crypto lobbying: 
Sen. Warren Opposes Blockchain Association Lobbying Efforts

Read more about the arrest of Telegram CEO Pavel Durov: 
Telegram CEO Pavel Durov Released on €5M Bail, Faces Long Legal Battle in France

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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