Considering the upcoming elections, crypto companies have increased their political funding in an attempt to influence regulatory debates.
According to report from Financial Times, the cryptocurrency industry has significantly increased its political donations in Washington in response to growing regulatory challenges and skepticism.
This strategy highlights the escalation in the crypto sector’s engagement with political processes to shape the narrative and policies surrounding digital assets.
From the crypto sector, Coinbase, Circle, and a16z – the cryptocurrency investment arm of Andreessen Horowitz – are allocating more resources to influence pending bills in Congress and support legislators friendly to cryptocurrency.
These three firms recently contributed $78 million to Fairshake, a federal Super Political Action Committee (PAC), which can accept unlimited funds from companies and individuals and focuses on advocating for crypto-friendly leadership.
Coinbase’s chief policy officer Faryar Shirzad stated that this initiative aims to “keep crypto out of politics” and create a more balanced public debate about the benefits and challenges of digital assets.
The report indicates a significant increase in the crypto industry’s political expenditures. Coinbase is set to spend about $4 million on lobbying this year, while Circle has already spent $760,000 since 2021.
Increased Scrutiny and Worries
The increase in political donations follows heightened scrutiny of cryptocurrencies after legal issues for companies like Binance and the arrest of FTX’s former CEO, Sam Bankman-Fried.
Senator Elizabeth Warren criticized cryptocurrencies as national security risks and linked to illegal activities. She and other lawmakers are pushing for stricter regulations on the crypto industry.
However, the industry’s current lobbying efforts face significant challenges as recent scandals provide more ammunition for traditional financial institutions and regulators in their criticisms of cryptocurrencies.
Senator Roger Marshall supports Warren’s bill, which includes stricter anti-money laundering measures for the crypto sector, aligning it with traditional banking regulatory standards.
As the 2024 elections approach, political activities in the crypto industry are intensifying.
Orlando Cosme, the founder of OC Advisory, told FT that a Democratic victory in the elections could pose significant regulatory hurdles for cryptocurrencies. This possibility is driving the industry’s proactive political participation to ensure the election of crypto-friendly candidates.