crypto lobbying efforts are on the rise, showcasing a significant increase as companies aim to influence policies shaping the future of digital assets. This surge underscores the growing importance of lobbying as the crypto sector becomes more intertwined with mainstream finance.
The Evolution of crypto Lobbying
A recent study by Social Capital Markets revealed a staggering 1,400% increase in crypto lobbying since 2017. In 2023 alone, crypto companies spent $40.42 million on lobbying, a significant increase from $2.72 million in 2017, with 60% of the total expenditure occurring in the last two years.
Lobbying, often misconstrued as bribery, plays a crucial role in shaping public policy by enabling industries to communicate their interests to lawmakers. In the U.S., lobbying is constitutionally protected and has become a central tool for the crypto sector, especially with growing regulatory scrutiny.
As regulatory pressures mount, crypto companies are investing heavily in lobbying efforts to ensure that new policies align with their objectives.
Since 2017, the industry has devoted $131.91 million to lobbying, with $78.94 million allocated in 2022 and 2023 alone. This influx of funds is a response to increasing regulatory pressures, particularly in key markets like the U.S., where lawmakers are deliberating on the best approaches to regulate digital assets.
Leading the charge in lobbying expenditures is Apollo Global Management, which invested $7.56 million in 2023 under its Apollo crypto arm. The Managed Funds Association followed with $4.11 million, while Coinbase, a prominent crypto exchange, allocated $2.86 million for lobbying in the same year.
Coinbase's lobbying investment saw a remarkable 3,475% surge since 2017, reflecting the exchange's escalating efforts to influence favorable crypto legislation. Other noteworthy contributors include binance.US, which increased its lobbying budget by 656% between 2021 and 2023, and Ripple, with a substantial 1,780% rise from $50,000 in 2017 to $940,000 in 2023.
Tether Operations, a key player in the stablecoin space, also augmented its lobbying expenditures by 158% over the past year.
The Role of Revolvers in Lobbying And Legislative Action Driving Its Adoption
The study highlights the use of "revolvers" – individuals transitioning from government roles to private-sector lobbying positions. These revolvers leverage their insider knowledge of governmental processes to assist employers in navigating complex regulatory environments.
For instance, in 2023, Apollo Global Management employed 104 lobbyists, with 78 of them being revolvers. Similarly, Coinbase relied on 39 lobbyists, with 32 of them being revolvers. The prevalence of revolvers underscores how crypto firms deepen their connections with policymakers.
As governments worldwide move towards stricter regulations, the surge in lobbying is a natural response to safeguard the industry's interests. The top five lobbying spenders since 2017 – Apollo Global Management ($28.71 million), Managed Funds Association ($21.96 million), CME Group ($10.19 million), Coinbase ($8.45 million), and Block Inc. ($6.37 million) – have emerged as key influencers in shaping crypto-related policies.
An exemplary case of crypto lobbying efforts is exemplified by Fairshake, a crypto-focused super PAC. Recently, Fairshake announced plans to allocate $25 million for TV ads supporting pro-crypto candidates in the U.S. House of Representatives. Supported by industry giants like Coinbase and Ripple, the PAC aims to promote crypto-friendly legislation, with recent campaigns contributing to significant wins like Rep. John Curtis's victory in Utah.
