Despite a significant increase in spending since 2017, crypto lobbying spending still accounts for less than 1% of total money spent on this activity in the US.
Crypto lobbying spending in the US increased by 1,386%. Photo: CNBC
Lobbying efforts increased over time
A recent study found that crypto companies in the US have significantly increased their lobbying efforts, with spending increasing by 1,386% from 2017 to 2023.
Lobbying spending in the US since 2017. Source: Social Capital Markets
According to data from Social Capital Markets , in 2023 alone, crypto companies spent $40.42 million negotiating regulatory changes, showing the importance of maintaining government relations in the industry.
The bulk of the spending has been concentrated in the past two years, with $78.94 million — nearly 60% of total spending over the seven-year period — invested in 2022 and 2023. The increase reflects the industry’s increased efforts to influence U.S. lawmakers amid regulatory uncertainty over digital assets.
Crypto companies lead the lobbying
In 2023, Apollo Global Management led lobbying efforts for the crypto industry, spending $7.56 million. The firm, which launched its Apollo Crypto platform in 2021, hired 104 lobbyists, including 78 former public sector lobbyists.
Coming in second was the Managerial Fund Association (MFA) , with $4.11 million in spending. The MFA, which represents alternative asset managers, employed 32 lobbyists, including 25 revolvers.
Coinbase has increased its lobbying spending significantly over the years. The exchange spent $2.86 million in 2023, up 3,475% from $80,000 in 2017. Coinbase’s total lobbying expenses since 2017 have reached $8.45 million, with 74% of that spent in the past two years. Coinbase has hired 39 lobbyists, including 32 revolvers.
Ripple Labs is also among the crypto companies that are spending big on influencing lawmakers, with costs increasing 1,780%, from $50,000 to $940,000 in 2023.
Additionally, Binance.US invested $160,000 in 2017 and $1.2 million in 2023, a 656% increase in lobbying spending. Stablecoin issuer Tether spent $1.2 million on this activity in 2023, while decentralized exchange Uniswap and fintech giant Block Inc. poured in $280,000 and $1.7 million, respectively.
Lobbying costs spent by some crypto companies. Source: Social Capital Markets
The companies have all faced certain legal hurdles over the years. Ripple has been sued by the US Securities and Exchange Commission (SEC) since 2020 regarding the sale of XRP Token Sale ; Binance.US has also faced numerous challenges at both the federal and state levels, with the SEC accusing Binance.US of operating illegally; Coinbase has also been in a legal dispute with the SEC , accused of offering disguised securities through its platform.
From this, it can be seen that the main reason behind the increased lobbying is the industry's urgent need for regulatory clarity. To date, the US still does not have a clear legal framework for digital assets, and the crypto industry is pushing for more appropriate regulations to differentiate them from traditional financial products.
Political donations are on the rise
While lobbying spending from crypto companies has increased significantly, it still accounts for less than 1% of total lobbying spending in the US, estimated to reach $4.26 billion in 2023. While crypto is slowly gaining ground in Washington, the sector remains a small player compared to more established sectors like healthcare, finance, and energy.
Spending is expected to be lower in 2024, with crypto companies spending $13 million on lobbying in the first half of the year — less than half the $40.42 million spent in 2023. However, the decline coincided with a significant increase in political donations. The crypto industry spent more than $119 million on federal elections this year through political action committees (PACs), accounting for nearly half of all corporate spending on elections this cycle.
Coinbase led the way with $51 million in donations , including $500,000 to both Republican and Democratic PACs, such as the Congressional Leadership Fund and the Senate Leadership Fund. The bulk of Coinbase’s funding — $61.5 million — went to Fairshake PAC, which actively backs pro-crypto candidates and opposes those hostile to the industry.
Coin68 synthesis
Join the discussion about the HOTTEST issues of the DeFi market in the Fomo Sapiens chat group with Coin68 admins!!!
