The new study by the Money Mongers Team focused on lobbying expenses by crypto companies: specifically, with a focus on Coinbase, Binance, and FTX.
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Lobbying spending by crypto companies: up 922%
The Money Mongers Team conducted a study revealing that lobbying expenses by crypto companies increased 922% from $2.5 million (2017) to $25.57 million (2022) and increased 121.41% from $11.54 million (2021) to $25.57 million (2022).
Lobbying is often labeled as corruption by many people who do not understand the system, but it is a vital part of participatory democracy. Indeed, lobbying is protected by the US Constitution and occurs secretly in every country.
As part of lobbying the government, individuals and organizations conduct public campaigns to get elected officials to collect and approve specific public policy actions in support of their agendas.
The same is also done by cryptocurrency companies, and in 2022 alone, they helped lobby up to $25.57 billion with the sole motivation of influencing policies in their favor.
In this way, companies that stand to profit from cryptocurrency lobbying spend a significant amount of money to ensure that pro-cryptocurrency laws are passed as soon as possible.
For this reason, cryptocurrency lobbying expenses have grown substantially over the past half-decade or so.
Crypto lobbying expenses for Coinbase, Binance, and FTX
In 2022, Coinbase spent $3.30 million, making it the company that spent the most cryptocurrencies, followed by Blockchain Association with $1.9 million and Robinhood with a spending of $1.84 million.
Coinbase’s spending has increased 4137% over the past six years, from $80,000 (2017) to $3.30 million (2022) and increased 122% from $1.52 million (2021) to $3.30 million (2022). Meanwhile, Binance‘s crypto lobbying expenses increased by 500% from $160,000 (2021) to $960,000 (2022).
FTX also experienced a 1340% growth in lobbying expenses from $50,000 (2021) to $720,000 (2022). Whereas Ripple experienced a 2060% increase in lobbying expenses from $50,000 (2017) to $1.08 million (2022).
Almost half of the total lobbying spending by cryptocurrency companies has come in 2022. Indeed, the total for the past six years is $50.75 million, of which $25.57 million was spent in 2022.
According to Money Mongers’ research, in the year 2022, first among the top three companies lobbying the government to enact more pro-crypto laws was Coinbase.
As anticipated, Coinbase spent $3.30 million on lobbying, which is the highest among cryptocurrency companies in the United States. Furthermore, they have the second highest spot trading volume ($1.16 billion) after Binance, which alone explains why they would be interested in spending so much on lobbying efforts.
Finally, they used a total of 32 lobbyists during the year, 26 of whom were revolvers. It is common practice among people working in the public sector, including congressional staff, to accept jobs with lobbying firms because they understand the inner workings of the sectors they used to oversee.
These people are called ” revolvers,” while those who do the opposite, that is, from lobbying firms to public offices, are called “reverse revolvers.”
The trend of spending on lobbying activities since 2017
Going back to 2017, Money Mongers plotted a graph to show how lobbying spending has increased. This shows which of the companies have long been supporters of lobbying campaigns and spent more on lobbying as a whole.
As mentioned above, spending on cryptocurrency lobbying has taken off over the past six years and has shown a 922% growth from $2.5 million in 2017 to $25.57 million in 2022.
As for individual companies, the top five companies that have contributed the most to this spending in the past six years are: ECM Group, Coinbase, Block Inc (Square Inc), Blockchain Association, and Robinhood.
Specifically, the CME Group is a leading proponent of Bitcoin and Ethereum derivatives contracts that allow traditional financial investors to get a taste and profit from the volatile prices of cryptocurrencies without ever taking ownership of the asset.
Since 2017, when the first derivatives contracts for Bitcoin were offered on the exchange, the crypto derivatives market has generated a lot of volume. The company has spent nearly $8.26 million on lobbying since 2017, which puts it firmly at the top of this list.
They used 20 lobbyists in the year 2022, of which 13 were revolvers. Coinbase, as it is known, is one of the oldest crypto exchanges in existence when it comes to buying and selling cryptocurrencies.
Established in 2012 mainly for the US audience, it has now spread to more than 100 countries. Being so prominent, the exchange has carried out a total spending of $5.595 million in the past six years, occupying the second place on the list and has experienced a steady growth in lobbying expenses year after year.
To conclude, it can be said that lobbying has worked in favor of the cryptocurrency industry, with the involvement of companies such as Meta and IBM. However, it has not all been straightforward, as just pouring money into the act of lobbying does not guarantee favorable results.
Indeed, many companies and people who are involved in the cryptocurrency game continue to be skeptical about the changes the crypto-sphere will bring to the financial world and dismiss the progress of lobbying firms.