- In 2022, cryptocurrency companies spent a record $21.55 million political lobbying in Washington.
- At the top of the list was Coinbase, the most prominent cryptocurrency company in the US.
- Sam Bankman-Fried was among the mega donors.
An organization that monitors political spending OpenSecrets, examined reports from more than 50 participants in the cryptocurrency market and revealed that in 2022, the industry spent a record-breaking $21.55 million on lobbying in Washington.
It’s interesting to note that the amount was more than twice as much as the $8.29 million the sector spent the year before. Lobbying refers to efforts to sway government officials’ choices, notably those of legislators and regulators, in favor of a specific interest group or industry.
The report claimed that the industry was attempting to gain more significant influence and support in Washington due to heightened regulatory scrutiny and negative public opinion of cryptocurrencies. This was indicated by the substantial increase in lobbying spending by crypto firms.
According to the report, Coinbase spent nearly $3.4 million on lobbying in 2022, making it the top. The Blockchain Association, Crypto.com, Binance Holdings, and Ripple were the next-highest spenders on lobbying, contributing roughly $1.9 million, $1.2 million, $1.1 million, and $1 million, respectively.
It is worth noting that Campaign contributions are not considered lobbying spending, although donors use them for cultivating relationships with policymakers.
Lobbying expenditures hit a record high during the year when the industry faced a series of high-profile failures, starting with Terra’s algorithmic stablecoin and concluding with the demise of FTX, a cryptocurrency exchange, and, most recently, Genesis, a cryptocurrency lending firm.
Although the crypto industry is spending more on lobbying, the sums paid by its businesses and trade associations are still far less than those made by more powerful Washington players. For instance, an investigation by OpenSecrets found that Amazon and its subsidiaries spent $21.38 million in 2022.
Sam Bankman-Fried provided massive donations to politicians in 2022.
Sam Bankman-Fried, the founder of FTX awaiting trial on fraud charges, was a significant donor for the 2022 midterm elections.
Bankman-Fried contributed about $40 million to political action groups and elections, with most of the money going to the Democratic party and its politicians. Elon Musk asserted that Bankman-Fried may have given the Democrats up to $1 billion in December. The rumors started after the ousted FTX CEO admitted that only some of his political contributions were made in the open.
Musk said:
“That’s just the publicly disclosed number. His actual support of the Dem elections is probably over $1B. The money went somewhere, so where did it go?”
The Supreme Court’s 2010 decision in the Citizens United case, which permits contributors to give money to politicians anonymously, has made secret payments legally permissible.
Nevertheless, more recently, the current FTX management has asked politicians and other receivers of donations made by Bankman-Fried and other FTX executives to refund the money by the end of the month.
The announcement added:
“To the extent such payments are not returned voluntarily. The FTX Debtors reserve the right to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced.”
