Facing heightened scrutiny from the U.S. Securities and Exchange Commission (SEC), cryptocurrency companies are ramping up their lobbying efforts on Capitol Hill to garner support for legislation that aims to rein in the agency and establish regulatory clarity for the industry. With prominent industry associations and companies actively engaging with Congress, a renewed push is underway to shape forthcoming legislation in hopes of addressing regulatory concerns.
A Call for Regulatory Clarity
Industry groups, including the Blockchain Association, Chamber of Digital Commerce, Crypto Council for Innovation, and Coinbase Global, are fervently engaging with lawmakers to build bipartisan support for a draft bill. Their objective is to define the classification of cryptocurrencies as securities or commodities and to delineate the respective oversight roles of the SEC and the Commodity Futures Trading Commission (CFTC). The bill, initiated by Republican representatives Patrick McHenry and Glenn Thompson, is considered the most comprehensive and likely to pass, thanks to the coordination between committees overseeing the CFTC and SEC.
Crypto Lobbyists Seek Bipartisan Support
Recognizing the importance of bipartisan backing, crypto lobbyists are actively working to convince Democrats on the Financial Services and Agriculture committees to support the bill. Despite concerns expressed by some Democratic lawmakers, such as Maxine Waters and David Scott, who worry about potential limitations on the SEC’s powers, other Democrats, including Vicente Gonzalez and Sylvia Garcia, remain undecided and could be persuaded to endorse the legislation. Lobbyists are emphasizing that the bill is a starting point and that it would help safeguard American innovation and jobs.
Challenges in the Aftermath of Scandals
The credibility of the crypto industry has been significantly impacted by recent scandals, most notably the collapse of FTX and the indictment of its founder, Sam Bankman-Fried. Industry representatives acknowledge the setback caused by these events, particularly due to Bankman-Fried’s significant presence in Washington. In response, crypto companies have allocated substantial resources to lobbying efforts, including millions of dollars in federal lobbying expenditures and grassroots campaigns urging crypto users to contact lawmakers.
As the SEC intensifies its crackdown on the cryptocurrency industry, companies and industry associations are making a concerted effort to shape forthcoming legislation and seek regulatory clarity. Engaging with lawmakers on Capitol Hill, they aim to define the regulatory classification of cryptocurrencies, clarify the oversight roles of the SEC and CFTC, and foster bipartisan support for the proposed bill. With both challenges and opportunities ahead, the outcome of these lobbying efforts will have a significant impact on the future of the crypto industry in the United States.
