How Coinbase, Binance, and Kraken boosted crypto lobbying amid $24m push on Capitol Hill

How Coinbase, Binance, and Kraken boosted crypto lobbying amid $24m push on Capitol Hill
Coinbase CEO Brian Armstrong's company held its spot as crypto's biggest spender on lobbying lawmakers last year. Credit: Rita Fortunato
  • Coinbase topped crypto lobbying with an 11% jump in spending in 2023.
  • The industry targeted multiple bills and initiatives during a regulatory crackdown.
  • Tether more than doubled its spending in Washington to influence policy.

The US crypto industry is clamouring for tailored regulation — and is spending lots of moolah to make it happen.

In 2023, the industry spent $24.5 million, an 11% increase from 2022, to sway Congress on a smattering of proposed crypto laws.

But what did the industry lobby for? Who were the biggest spenders? What did they spend their money on?

DL News found out.

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Big spenders

Coinbase was the crypto industry’s top spender on the Hill in 2023, although the exchange reduced its lobbying bill by almost 15%, to $2.9 million, according to data gathered by OpenSecrets, a nonprofit organisation that tracks political spending.

The listed company lobbied for the Infrastructure Investment and Jobs Act — a massive infrastructure bill passed by President Joe Biden that is pumping $1.2 trillion into decaying roads, bridges, and broadband networks across the US.

The act makes some changes to the tax code that could force crypto exchanges to report users’ details to the Internal Revenue Service.

Coinbase lobbied government agencies, including the Commodity Futures Trading Commission, the Homeland Security Department, the Treasury Department, and the Securities and Exchange Commission.

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Coinbase didn’t reply to DL News’ requests for comment.

The Blockchain Association was the second-biggest crypto industry spender, with just under $2 million — up $60,000 from the year before.

“[Our] goal is to engage directly with policymakers through relationship-building and educational initiatives, furthering our commitment to advocate for a common sense regulatory framework in the United States,” a spokesperson for the Blockchain Association told DL News.

17 bills

The industry group lobbied for 17 bills, including one that seeks to block the establishment of a central bank digital currency, or CBDC, in the US.

The Blockchain Association lobbied the CFTC, Consumer Financial Protection Bureau, and IRS, among other departments.

The CFPB recently issued a rule proposal that could see certain crypto companies fall under the same regulation as banks.

Binance was crypto’s fourth-biggest spender on The Hill in 2023.

Stablecoin issuer Tether more than doubled its spending on lobbying to $1.2 million in 2023, which makes its owner iFinex the third-biggest spender of the year.

While Tether doubled the number of lobbyists on its payroll to six last year, OpenSecrets didn’t say what bills or initiatives it lobbied for or against.

“Our efforts are primarily directed toward fostering educational initiatives and engaging in ongoing dialogues with policymakers and regulatory authorities,” a Tether spokesperson told DL News.

With $1.2 million spent on lobbying last year, Binance was crypto’s fourth-biggest spender. A company subsidiary spent $350,000 of that sum.

OpenSecrets data didn’t reveal which bills the exchange lobbied for.

The exchange started hard in 2023, spending almost $1 million in the first half of the year, as DL News has previously reported, but then slowed its spending dramatically in the second half of the year.

Payward, the parent company if the crypto exchange Kraken, increased its lobbying more than 168%, to to $1.2 million, last year.

In November, Binance admitted it violated the Bank Secrecy Act and agreed to pay a record $4.3 billion penalty.

Founder Changpeng Zhao stepped down after pleading guilty himself, and faces sentencing in the US in April.

Payward, the parent company if the crypto exchange Kraken, increased its spending on lobbying more than 168%, to to $1.2 million, last year.

“As one of the oldest and largest digital asset businesses, we recognise the importance of active engagement in public policy debates that impact our customers, employees, stakeholders, and the industry”, a Kraken spokesperson told DL News.

Lummis-Gillibrand bill

Market players lobbied hardest on a bill that would create a comprehensive regulatory framework for digital assets, data from OpenSecrets shows.

The Responsible Financial Innovation Act is the result of a collaboration between two senators: Republican Cynthia Lummis of Wyoming and Democrat Kirsten Gillibrand of New York.

The bill was reintroduced in July after it had originally been introduced in 2022.

That was “the most-lobbied bill for the crypto industry from 2019 to 2022, and remained a popular issue for crypto clients in 2023,” OpenSecrets researcher Olivia Buckley told DL News.

The bill requires crypto exchanges to register with regulators, strengthens consumer protections, and includes provisions for decentralised finance.

Buckley said two other bills introduced in 2023 that are aimed at preventing consumer fraud, money laundering, and sanctions evasion also attracted money.

They include the Crypto-Asset National Security Enhancement and Enforcement Act, which targets DeFi and crypto ATMs, and Massachusetts Senator Elizabeth Warren’s Digital Asset Money-Laundering Act.

If they become law, both bills would compel trading platforms to collect more information on users to prevent financial malfeasance — undermining crypto’s main selling points of privacy, pseudonymity, and decentralisation, Buckley said.

The top spending on these bills were advocacy groups representing members in DeFi — the Filecoin Foundation, the DeFi Education Fund, and the Blockchain Association, Buckley said.

She added that “the role of those groups, whose lobbying spending has ramped up significantly in the past couple of years, will be an interesting thread to follow going forward as Congress works to establish a functioning regulatory framework for crypto.”

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