US crypto companies have stepped up their efforts to influence decision makers in 2021. In the US, $25 million was spent on lobbying, an increase of 121% year-on-year. We are looking at this still little explored sector of the ecosystem.
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Crypto firms have stepped up their lobbying efforts
Controversial in Europe, the practice of lobbying is however more common in the United States. Exchange platforms and large local companies therefore allocate a sometimes significant part of their expenses to this area. According to a report by The Money Mongers, Coinbase wins the day of the company that spent the most on lobbying in 2021. The American giant has spent 3.3 million dollars to influence policy decisions in favor of the ecosystem.
Prior to its downfall, FTX was also on track to drastically increase its contributions, with a budget increase which had reached +1340% between 2021 and 2022. We also note that Ripple, the issuer of XRP, spent more than one million dollars during the year 2022.
In total, half of the sums spent on lobbying were spent in 2022. It is a reflection of the evolution of the ecosystem… But also certainly a direct consequence of the repeated crises experienced during this year.
Ranking of the American companies having spent the most on lobbying in 2022
We see that the majority of large crypto companies located in the United States allocate substantial sums to lobbying.
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A controversial practice
The Money Mongers report presents the practice of lobbying in a positive light, but it is of course controversial. Some commentators point out that the “revolvers”, i.e. the decision-makers who choose to leave their position to become a lobbyist, raise questions in terms of conflict of interest and neutrality.
Especially since we recently saw a telling example of this porosity. Following the FTX affair, it was learned that nearly 37% of the members of the American Congress received money from company executives. A trend that may have explained the particularly favorable positioning of part of the political class with regard to Sam Bankman-Fried – whose parents are invested in the American Democratic Party.
On the other side of the problem, we also note great hostility from regulators – and great ignorance of the sector – which are sometimes appeased by lobbying efforts. Is it therefore a survival issue for the ecosystem, or a practice too controversial to be viable? The question is asked.
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Source: The Money Mongers
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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