Dec 5, 2023

Reuters reports that U.S. lobbying spending by the crypto industry is on pace to hit a record high this year.

Video transcript

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. Reuters reports that the US lobbying spending by the crypto industry is on pace to hit a record high this year 2023. Some of you might be watching this in 2024 but we're talking 2023. Joining us now to discuss is Coin Desk, global policy and regulation, managing editor Nick Day who is also editor of Coin Desk State of crypto newsletter. The perfect gift for the holidays, Hanukkah is coming up, everybody sign up, sign up as many of your friends as you can. They'll thank you in the future. Hello, Nick. Happy Tuesday. Good morning, good morning to you. So uh $20 million this most recent quarter Q three spent on lobbying by crypto companies who are the biggest spenders here. Yeah. So this is going to come as no surprise. But Coinbase so far looks to be the uh you know, heaviest spender on lobbying efforts and lobbyists this year. Uh biggest crypto change in the US. Uh Also one that's been uh let's say somewhat engaged with regulators um at the security exchange commission, but also, you know, has a whole effort dedicated to trying to get people more involved in uh you know, politics around crypto. So uh not a huge surprise, other big names include parent Company Finance, uh which of course have also had their, you know, own engagements with regulators this year. So I I, you know, nothing super surprising but some pretty big names. Nick, we got to address the elephant in the room last year. Bankrupt crypto Exchange. FTX was among top spenders. Do you think that some of the spending that's happening this year is to change the image that FTX created for the industry when it imploded in November last year? I am, I'm speculating a tiny bit here, but I would be very surprised if a lot of these uh other companies didn't have their lobbyists go out there and say, yeah, those were um here's how we're different. You know, they're gonna want to make a clear distinction between how FCX operated and how Cobas, whoever cracking uh all these other us crypto exchanges, how they're operating? Um So I'm sure that's going to be a topic that has come up. Uh Certainly, you know, we've seen in public statements, you know, members and individuals from these exchanges say, uh you know, FD I lack these patrols or, you know, whatever safeguards in contrast with Coinbase and Finance, uh which have been arguing even in court that they have much better systems in place suits and buzz cuts. That would, that would for one thing, uh distinguish them from uh FTX but the other seriously, like, like, you know, the presentation thing, like, no one wants to see a guy with a hoodie and have hair ever again. I, I, that, that's not a joke. Like they, they're done with these, uh what's that? You know, just like the image itself that they're projecting. Absolutely. They want to be, you know, we're professionals, we're not, you know, whatever, wearing uh you know, shorts and walking through Bahamas, we're here in the US, we like, we have headquarters and all that. So, yeah, I, yeah, there's a whole projection whole like image thing that I'm sure has been kind of emphasized over the last year too. The uh other thing and, and this is a discussion we had with Ryan Selk uh earlier about where the money goes. Uh Obviously 2024 is the, is a big election year because of it every two years. A third of the Senate goes up, of course, presidential election, but the house is really always on the razor thin uh majority here. Uh This is some of the tightest we've ever seen it in history. Uh Is it, is the money going in or are the money really uh going into uh house races more? Do we know any, how it's being spent where it's being spent? What kind of uh how is it being tossed around and what kind of races? I haven't seen the underlying data yet. I'm sure it's going to some combination of the above as you know, this is a presidential year coming in. And so, uh I'm, you know, there's gonna be a huge amount of consideration around questions like who will the next president be and who will the president's regulators be? So, you know, if you're looking at the presidential election, you know, if President Biden wins re-election, then presumably, you know, you'll see the existing stack of regulators continue on. So the SEC with Gary against the CFCCR Benham Treasury Secretary Yellen, uh they'll all, maybe they'll transition out into a new term, but it'll be a transition into the same party. If a Republican wins the, you know, presidency, then, you know, obviously it will be complete shake up. We'll see completely new, uh you know, leadership at these agencies. Um So I'm sure that is a huge consideration for a lot of these, uh you know, people who are working on lobbying efforts. Um The House, of course, there's a huge legislative push right now and, you know, from all accounts, this is a legislative push that may well end within the next couple of months as election season gets in the full swing. But, you know, once the election is over, once the, you know, next term is sworn in in 2025 you know, you'll see people uh you, you'll see this effort, you know, kind of come back. People are going to start all over again, but they'll have the work of, you know, the bills that have been introduced over the last few years to build on. I did the Senate, which honestly I think is kind of being almost unders considered a little bit. The Senate is a pretty big player. Of course, you know, it's one half of the legislative, you know, body, but also I, you know, Senator Sherrod Brown is running for re election. He is the chair of the Senate banking committee. Um, you know, his election or re-election is going to be pretty pivotal as far as legislation goes just because of the position he holds. So, you know, there's really, uh, this is gonna be one of those elections where if you're in crypto and by the way, I have not yet seen any evidence of actual, uh, you know, crypto voters, crypto does not seem to be a single issue. People are going to vote on the same way, for example, the economy or might be. But if you are at least considering crypto, there is a pretty huge swath of, you know, the political process that you're gonna want to consider.

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