Sat 07 Sep 2024 ▪
4
min read ▪ by
At a time when regulating this booming market has become a crucial issue, lobbying expenses by crypto companies are reaching staggering amounts. In 2023, these players spent more than $40 million to represent their interests to governments. This surge in lobbying expenses means a real battle for the future regulatory framework of cryptos.
An explosion in lobbying spending
In 2023, lobbying expenditures by crypto companies reached $40.42 million. This amount represents an increase of 1,386% compared to 2017, when investments in this area were only $2.72 million. Among the biggest spenders, Apollo Global Management stands out with a contribution of $7.56 million, followed closely by the Managed Funds Association ($4.11 million) and Coinbase ($2.86 million). Indeed, nearly 60% of the total expenditures were made in 2022 and 2023. These figures highlight the acceleration of lobbying efforts in a context where crypto regulation is becoming a priority for governments. Lobbying investments aim to influence regulation to ensure a favorable environment for crypto innovation.
This lobbying race is also marked by a strong mobilization of human resources. For example, Apollo Global Management employed 104 lobbyists, including 78 “revolvers”, that is, former members of the public sector now active in the private sector. These people benefit from precise knowledge of the internal functioning of public decision-making bodies.
The race for regulatory influence
Another key player in this dynamic: Coinbase, whose lobbying expenses have increased by 3475% since 2017. From $80,000, they rose to $2.86 million in 2023. The rise of the Californian company is part of its strategy to become a key player in the development of crypto laws in the United States. With a presence in more than 100 countries and a high transaction volume, Coinbase is positioning itself as a central figure in crypto exchanges and intends to strongly influence decisions that could affect its business model. It has employed 39 lobbyists, including 32 revolvers, to strengthen its political weight.
Other companies are not far behind. Binance.US has also seen its spending explode, with a 656% increase between 2021 and 2023. Ripple, meanwhile, has increased its spending by 1,780% since 2017. The growing influence of crypto players over lawmakers could well shape laws that are particularly favorable to them. However, this dynamic raises concerns about the balance between innovation and consumer protection.
The surge in lobbying spending in the cryptocurrency sector reflects a clear desire by companies to influence a regulatory framework that is still under construction. While these massive investments demonstrate the industry’s growing influence in policy decisions, they also raise concerns about the independence of regulators in the face of such powerful private interests. Hiring former industry executives is a strategy that has lawmakers increasingly worried.
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A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I made a commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, decipher market trends, relay the latest technological innovations and put into perspective the economic and societal challenges of this ongoing revolution.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be considered investment advice. Do your own research before making any investment decision.
