Cryptocurrency market participants and advocacy organizations including Coinbase, FTX.US, Binance.US, The Blockchain Association, and others have spent more than $25 billion in 2022 for their efforts to lobby with policymakers. Lobbying expenses for Web 3 projects have increased over 920% since 2017, according to a study by The Money Mongers.
Coinbase tops the list of crypto lobbyists
There is no news that lobbying, a process whereby individuals, special interest groups or stakeholders in any given industry make a conscious effort to influence the decisions of policy makers or government, is practiced in almost all areas of the global economy and the Web3 space is no exception. .
While lobbying is often confused with bribery by those who do not understand how it works, it remains an integral part of participatory democracy. Lobbying is being exerted by industry leaders and advocacy groups in almost all countries of the world, to get the authorities to formulate appropriate and favorable policies for their sector.
according to Stady By The Money Mongers, an independent crypto and Web3 think tank co-founded by Sudhir Khatwani, crypto-related companies in the US alone spent $25.57 billion on lobbying efforts in 2022.
Brian Armstrong’s Coinbase, the largest venue for trading bitcoin (BTC) and altcoins in the US by volume, spent $3.30 million on lobbying in 2022, making the 11-year-old exchange the highest spender in the region.
However, it should be noted that despite Coinbase’s lobbying efforts, the exchange recently received a notice from Wells from the Securities and Exchange Commission (SEC), allegedly violating the country’s securities laws. How that battle ends remains to be seen.
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The pressure on cryptocurrencies is on the rise steadily
The study also shows that total lobbying expenditures by Web3 market participants over the past six years has increased by 922%, rising from $2.5 million in 2017 to $25.57 billion in 2022.
Coinbase’s lobbying expenses have increased 4,137% in the past six years, from $80,000 in 2017 to $3.39 million in 2022. Coinbase has so far hired 32 lobbyists and 26 handguns. Pistols refer to government workers who work with lobbying firms.
The Chicago Mercantile Exchange (CME) group is second on the lobbying list, having spent $1.43 million last year. The CME Group has spent more than $8 million on lobbying efforts since 2017, hiring a total of 20 lobbyists and 13 revolvers over that time.
Last year, the Blockchain Association, a leading Web3 advocacy group, spent $1.9 million on 18 lobbyists and 12 guns. Robinhood spent $1.84M, Jack Dorsey’s Block spent $1.17M, and FTX.US spent $720K on lobbying.
More obstacles wide
Despite significant spending on lobbying over the years, recent dark events in the industry such as Sam Bankman-Fried’s shameful FTX scandal and other high-profile bankruptcies have heightened regulatory scrutiny on the web3 space, giving market participants more work to do. tags in terms of image recovery.
“While regulatory frameworks are being discussed and implemented in the US, lobbying expenses by US-based crypto firms will only go up, and just like any other industry, cryptocurrency firms are also trying to have their fair share of successes and failures until now . “
Sudhir Khatwani, Co-Founder and Editor-in-Chief at The Money Mongers.
In general, cryptography and the revolutionary blockchain technology that supports it is here to stay. However, industry players still need to do more in terms of transparency and accountability. Only then will more jurisdictions follow President Nayib Bukele’s El Salvadoran lead in legalizing these highly volatile digital assets.