America, land of the free, home of the brave, and now, a playground for crypto lobbyists who seem to have taken the term “influencing policy” to an entirely new level, kickstarting a sort of political war that could very well dictate the future of finance in the United States. Think I’m being dramatic?
Okay.
Read on!
You’d think with high-profile cases like Sam Bankman-Fried’s, serving a 25-year vacation in prison for his crypto shenanigans, and Changpeng “CZ” Zhao, awaiting his fate for skirting around some important legal policies, America would be on the verge of taming the beast that is cryptocurrency industry. Not to mention, the spectacular implosion of digital tokens like Luna has left many a crypto magnate looking less like the future of finance and more like cautionary tales.
Do NOT jump in.
That’s what *they* say.
The Undying Spirit of Crypto Enthusiasts
But man, despite all the setbacks, the crypto industry is doing better than ever. Bitcoin, the poster child of cryptocurrencies, recently hit a record-breaking $73,000. This is because the folks mining Bitcoin decided to slow their roll, and also of course, because the gates have been flung wide open for bitcoin exchange traded funds, thanks to the nod from our friendly neighborhood SEC.
Now, what’s truly mind-blowing to me is how the crypto sector, in the face of all these regulatory slapdowns, has decided to double down on its efforts to sway future regulatory frameworks. And I’m not just talking about a few million dollars thrown at political campaigns.
Oh no. There is a full-blown, wallet-breaking campaign that has seen crypto lobbying funds jump from a mere $1.5 million in 2020 to a jaw-dropping $27 million in 2022. And with the FTX drama not deterring these efforts, 2023 saw an even bigger splash of cash, mainly from Coinbase, alongside the Blockchain Association and Binance.
It gets even better — or worse, depending on how you look at it.
A so-called crypto dark money group called ‘Fairshake’ managed to get around $80 million in just the last quarter of 2023. Their mission was to take down any political figure daring to question the sanctity of cryptocurrency, with Senator Elizabeth Warren and Sherrod Brown being prime targets. As one would expect.
A Tangled Web of Money and Politics
The audacity of crypto lobbying efforts is mostly in their willingness to dive headfirst into American politics, challenging the very ethos of what many believed cryptocurrencies stood for — a financial system untainted by the grip of traditional power structures.
Yet, here we are, witnessing the crypto industry not just engaging with but actively shaping the political scene in America. The story spun by Fairshake and other crypto proponents about fostering innovation and needing a clearer regulatory framework might sound noble. However, when you peel back the layers, it’s clear that the end goal is to carve out an industry where they can thrive with minimal oversight.
Comparisons with traditional banking and other sectors’ lobbying efforts are inevitable.
Yes, the crypto lobbying machine might still be in its infancy compared to the Goliaths of the financial world, but what sets it apart is its focused aggression and the bipartisan nature of its influence. So both Republicans and Democrats find themselves in the crosshairs of crypto lobbyists.
The irony of it all? Crypto, once hailed as the digital David against the Goliath of the financial establishment, has now cozied up to the very “swamp” it aimed to drain. The Blockchain Association’s reluctant admission of their lobbying efforts as a necessary evil to protect their interests showcases the ironic position our industry finds itself in.
Sooooo, yeah that’s about it.
