As crypto grows in popularity, so does the interaction between Capitol Hill and the cryptocurrency industry. Crypto analytics startup Crypto Head gave concrete guidelines to the crypto industry’s surge in lobbying in February. The report showed that Robinhood, RippleLabs, Coinbase, and the Blockchain Association spent the most money lobbying in 2021. These were also the lobbying leaders in the past five years, though with different rankings.
This is how the United States crypto lobbying landscape looks today.
Robinhood spent $1.35million on lobbying in 2021, and was the only crypto-related organisation to spend more that $1 million. Ripple Labs came in second with $900,000. According to the Economist, $5 million was spent on lobbying by crypto firms in the first three quarters 2021.
This is a good example of how this works: The National Association of Realtors was the most expensive lobbying group in America in 2020 at $84.11 million, according to Open Secrets (the nonprofit that provided the data for Crypto Head).
Kristin Smith, executive director of Blockchain Association, stated in an email to Cointelegraph, “Spending is only a metric of influence and these roundups not often provide context on how effective dollars spent, and these roundups are not often used to contextualize the effectiveness of dollars spend.” Smith also noted that the Crypto Head report “mixes businesses with different focuses, multimember trade associations, and other entities, making it difficult for a one-to one comparison.”
Smith stated that education is her top priority. Last year, Smith stated to Fox News that her organization’s number one priority was helping Janet Yellen (Treasury Secretary) understand crypto beyond criminal financing.
Lobbying for cryptocurrency was not just the responsibility of the crypto industry. According to CNBC sources, the National Football League spent $600,000. lobbying Congress, U.S Securities and Exchange Commission and other government offices in 2021. The goal was to determine “whether crypto can become an integral part” of the League’s business. Andrew Yang, a former presidential candidate, launched Lobby3, an autonomous decentralized organization that will lobby Web3 for the elimination of poverty.
Crypto Head pointed out the presence of “revolvers” in the ranks cryptocurrency industry lobbyists. The Tech Transparency Project’s (TTP), report “Crypto Industry amasses Washington Insiders As Lobbying Blitz Increases” added to the richness of the narrative.
TTP reports that “two former chairs (SEC) of the Securities and Exchange Commission (SEC), and two former chairs (CFTC) of the Commodity Futures Trading Commission(CFTC), and one former Chairman of the Senate Finance Committee” were present. There are also “nearly 240 examples” of former lawmakers and staffers who have held key positions in Congress, the White House, the federal regulatory agencies and national political campaigns.
TTP recognized that revolvers are a common practice in many industries and not just for lobbying but also because of potential conflicts of interest when the industry is moved into government. Five “former top executives” at Circle Internet Financial, operator of the stablecoin USD Coin(USDC), joined the Federal Reserve Bank of Boston while the firm sought a Fed bank charter. The Boston Fed also participated in Project Hamilton research about a digital currency.
The crypto industry has another avenue to influence the political process through the creation of political action committees (PACs). There have been many organizations that are involved in this field. American Blockchain PAC was established in November with the aim of raising $300 million to support crypto candidates. It was revealed in February that it had raised less than $8,000 thus far.
The $10 million Democratic Protect Our Future PAC was established in January. Donors include Sam Bankman-Fried, CEO of FTX. With the backing of Anthony Scaramucci, former Donald Trump communications director, The Gonna Make it (GMI) PAC was launched in January. A tweet declared, “When you organize, when you mobilize, then we are unstoppable.” GMI PAC is a super PAC that will vote pro-crypto candidates for federal elections across the country. It plans to raise $20 million.
Coinbase launched its second attempt to launch a PAC in February. It was also a founding member in April of the Crypto Council for Innovation.
This year promises to be interesting for crypto politics in the U.S.