Close to $22 Million Spent Last Year On Lobbying By Crypto firms

Updated: 19 February 2023

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The crypto industry set a new record in 2022 in terms of the amount spent on lobbying in Washington, as companies in the sector spent a total of $21.55 million, more than double the amount spent the previous year. Based on the evaluation of reports by OpenSecrets, which gathered statements from more than 50 industry players, the industry’s lobbying expenditure saw a significant increase from the $8.29 million spent in 2021.

According to the report, the top spender was Coinbase, one of the largest cryptocurrency exchanges, which spent around $3.4 million. Other major players in the crypto space, including Blockchain Association, Crypto.com, Binance Holdings, and Ripple, followed, each spending $1.9 million, $1.2 million, $1.1 million, and $1 million respectively on lobbying activities. Notably, these figures only account for direct lobbying expenses and do not include campaign contributions, election finance, or political donations.

The surge in lobbying spending by the crypto industry came amid a series of high-profile incidents that included the implosion of Terra’s algorithmic stablecoin, the collapse of FTX exchange, and most recently, the failure of crypto lending firm Genesis.

Despite the record spending, the amounts spent by individual firms and trade groups in the cryptocurrency industry are still spending less than large technology and e-commerce corporations on lobbying. For example, according to reports by OpenSecrets, a research organization that tracks money in US politics, Amazon and its subsidiaries spent a total of $21.38 million on lobbying in 2022, while Alphabet spent more than $13 million on the same last year.

FTX reclaims political donations

Sam Bankman-Fried was among the major contributors to Joe Biden’s successful 2020 presidential campaign. Last year alone, the CEO of collapsed FTX spent about $40 million on political action committees and campaigns, the vast majority of which went to the Democratic Party and its candidates.

This value could be higher as in December, there were speculations that Bankman-Fried may have donated as much as $1 billion to the Democrats, following his admission that some of his political contributions were not made public. Such undisclosed donations are permitted under the Supreme Court’s Citizens United decision in 2010, which allows donors to give money to politicians anonymously.

It is worth mentioning that, just days before his crypto firm crashed, SBF announced that, in the run-up to the 2024 United States presidential election, he contributed millions of dollars to promote bipartisan candidates in order to entice more crypto allies.

However, according to a press statement, FTX debtors are sending communications to political figures and all other receivers of donations and contributions made by Bankman-Fried and other officials of the now-defunct cryptocurrency exchange, asking for the repayment of such assets by February 28, 2023. The notice also stated:

To the extent such payments are not returned voluntarily, the FTX Debtors reserve the right to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced.

The statement also noted that receivers of the donations would be obliged to return the amount received from FTX officials, even if the money was used to pay a third party, such as a charity.