2021-06-06 20:00:23
Crypto Industry's Lobbying Power Grows As Former Officials Change Sides
Crypto firms have been increasingly appointing former regulators and lawmakers in recent months. While the officially stated aim of such appointments is to help crypto industry better understand the regulatory landscape, it’s just as likely that the appointees have been enlisted to help firms lobby government and regulatory authorities more effectively.
But it’s not only former regulators and lawmakers who are joining cryptoasset companies, with former executives from the legacy financial system also jumping on the bandwagon. Together with former officials, these execs are not only helping improve the quality of leadership in crypto, but are also helping crypto to step up its lobbying game.
And according to lobbying data available in the United States, the big companies and trade associations are on course to break their spending records in 2021. This might be good news for the entire industry if we assume that claims by trade associations that they pursue the interest of all participants are true.
Even so, it’s clear from many of the press releases accompanying recent hires that a lobbying motive is very much present. With McDonnell and Nadeu’s appointments, for example, Binance, which is now reportedly being investigated in the US, stated that one of the main aims was “to support its overall objective to build stronger relations with regulatory and law enforcement bodies worldwide.”
In other words, lobbying. And this assumption is supported by the latest data on lobbying in the US, as compiled by OpenSecrets.
If you take a look at Coinbase’s entry in OpenSecrets’ database, you see that it’s on course to spend a record amount on lobbying in 2021. Its lobbying spending has been growing consistently every year since 2017, and even though it has data only for Q1 2021, this shows a noticeable growth over Q1 2020.
An increase is also visible with the Blockchain Association, whose members include Binance, Blockchain Capital, BlockFi, Circle, Digital Currency Group, eToro, Grayscale, Ledger, Polychain Capital, Ripple, Stellar, Uniswap, and numerous others. Its Q1 2021 spend also exceeds that for Q1 2020, standing at USD 130,000 (its total spend for 2020 was just under USD 500,000).
According to the Blockchain Association’s Graham Newell, what most crypto organizations and firms are lobbying for is clearer, more transparent regulation.
“It’s a misunderstanding that persists in much of the mainstream media and legacy financial worlds that crypto is an unregulated wild west. There are plenty of regulations in place that cover the crypto industry, both for individual consumers and large corporations. What we, and others, would like to see is further clarity on important issues, such as securities laws, custody provisions, and tax policy,” he said.
Likewise, the Global DCA says it’s pursuing fair regulation.
“Our focus and our task are simple: balanced regulation. Balanced regulation — which nurtures innovation and allows for further development of the industry while at the same time protecting consumers and the general public,” said Gabriella Kusz.
There’s a worry that lobbying may be conducted from the perspective of larger crypto firms, with any resulting regulation harming smaller companies. However, pretty much every trade association says that it aims to represent all members of the industry, large and small.
The CVA’s Ekaterina Anthony explains, “In our association, we listen to the opinion of all market participants, which we call the private sector, and we regularly inform the regulator of our consolidated opinions and requirements. We also work with other countries and associations that bring together crypto startups and big businesses, and most participants have very similar expectations and goals.”
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