Last week, the crypto industry's top companies flooded into Washington, D.C., for an annual conference—a policy summit hosted by the Blockchain Association, one of the sector's leading trade groups.
2023 had been a difficult year for crypto—major firms hit with federal lawsuits, Binance reaching a settlement with the Department of Justice, Sam Bankman-Fried's conviction—but despite the dour environment, speaker after speaker assured the crowd that crypto is here to stay—and that U.S. lawmakers are on the precipice of passing much-needed regulations.
According to a new report by Reuters, that sentiment has been backed by what could prove to be a historic spend on lobbying efforts. Data from the nonprofit research group OpenSecrets shows that crypto firms spent $18.96 million over the first three quarters, compared with $16.1 million during the same period in 2022, when about $22 million in total was spent, including money from FTX.
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After the collapse of FTX in November 2022, it was unclear how the political class would respond. FTX's founder and CEO, Sam Bankman-Fried, had been a relentless presence in D.C., pushing for his own favored legislation and donating millions of dollars to politicians. The crypto publication CoinDesk found that more than one in three members of Congress received campaign support from a senior executive at FTX.
Lawmakers quickly rushed to distance themselves from the disgraced founder and his firm, and they hosted hearings to assess the fallout from the scandal. Bipartisan legislation, which seemed possible out of different committees, in both the House and Senate, soon stalled, with Democrats especially urging for a slowdown on any new bills.
The campaign donations also became a central part of the criminal case against Bankman-Fried. Although the DOJ dropped a charge related to alleged illegal political contributions due to complications over an extradition agreement with the Bahamas, it remained a key argument in the prosecutors' court case, adding further embarrassment for politicians associated with Bankman-Fried.
Republicans continue to push for legislation to regulate stablecoins and create a market structure framework for the digital asset industry, with limited Democratic support, although any efforts seem stalled until 2024.
That slowdown hasn't slowed down crypto firms' spending. Reuters found that Coinbase, the largest U.S. crypto exchange, led at $2.16 million, followed by the operating company for Crypto.com, the Blockchain Association, and Binance.
Since Bankman-Fried's fall, Coinbase CEO Brian Armstrong has become one of the most visible figures in D.C., with Coinbase leading a political campaign called Stand With Crypto, which aims to convince politicians of grassroots support for the industry. Coinbase, which is embroiled in a lawsuit against the Securities and Exchange Commission that could threaten its business model, is hosting a crypto-focused presidential forum in New Hampshire on Dec. 11. Republican presidential candidate Vivek Ramaswamy, who unveiled a crypto plan in mid-November, is confirmed to attend.
