Crypto Executives, despite past setbacks, embark on renewed Washington influence campaign.
When lawmakers in Washington, D.C., watch their favorite Sunday morning political shows this week, they’ll also hear about cryptocurrency, courtesy of Coinbase’s campaign. This is part of the industry’s ongoing effort to shape U.S. policy.
Coinbase CEO Brian Armstrong and Messari CEO Ryan Selkis are working hard to create a well-supported movement to influence future cryptocurrency regulations. However, their efforts come at a time when the U.S. capital is still dealing with the negative consequences caused by the cryptocurrency industry in recent years.
In 2022, the story that cryptocurrency lobbyists wanted to tell U.S. lawmakers fell apart in chaos. The industry faced numerous business failures, frauds, hacking incidents, and harm to consumers, contributing to the turmoil. Additionally, members of Congress, who are tasked with creating new cryptocurrency laws, received a significant amount of campaign donations, with one in three current members receiving money from FTX executives. This led to embarrassing questions for lawmakers and difficulties in returning money tainted by the company’s association.
Crypto lobbyists face a tough task as they work to strengthen their connections with Congress and gear up for a presidential election year. Their challenge is to present an optimistic vision of the future while acknowledging the negative news events from the past year. They need to strike a balance by acknowledging the challenges without pretending that they didn’t happen, according to Ian Katz, a managing director at Capital Alpha Partners, a firm that analyzes policy developments in Washington.
When asked if Coinbase is taking into account the recent troubles while launching its new campaign, a spokesperson for the company did not provide a direct answer. Instead, the spokesperson stated that Coinbase is actively collaborating with policymakers and regulators to establish appropriate cryptocurrency regulations. They emphasized the importance of ensuring that these regulations are well-informed and acknowledged the risks associated with getting them wrong.
Brian Armstrong’s face will be shown in black-and-white TV commercials aired in the Washington area. In these commercials, he will inform viewers that “Crypto is the most important technology we have to modernize the global financial system.” The commercials will feature the campaign’s tagline, which is “It’s time to update the system.”
Coinbase, connecting this campaign with a previous effort called Crypto435 to directly influence lawmakers in all 435 congressional districts, has customized an armored truck with a unique design. This vehicle, similar to the ones used for transporting physical money, will roam around Wall Street displaying the message: “With Crypto, This Whole Thing Fits in Your Pocket.” Additionally, Coinbase plans to saturate the traditional financial hub of New York with various forms of crypto messaging.
The advertising campaign is similar to past initiatives by crypto exchange Gemini, which covered taxis and train stations with banners proclaiming “The Revolution Needs Rules.” It also resembles the efforts of Grayscale, which aimed to gain approval for its Grayscale Bitcoin Trust product to become an exchange-traded fund.
In the coming month, the renowned crypto entrepreneur and investor, Selkis, is anticipated to launch an organization called the Digital Freedom Alliance, as per a reliable source. Selkis had initially proposed the concept of a decentralized group to advocate for crypto policy support last year. He expressed his views on Twitter, suggesting that the initiative would involve participation from individuals and small firms.
Selkis attempted to ignite action by sending a letter to the key lawmakers of the House Financial Services Committee, which has been involved in crafting crypto-related legislation. In the letter, he urged them to take prompt action. Additionally, he shared the same message with other members of Congress who have relevance to the crypto industry.
Selkis wrote a letter that he also shared on Twitter (but has since been removed) stating that “ignoring the situation is no longer a choice.” He emphasized that digital asset technology cannot be undone as it has already become well-established and holds significant economic potential.
He described his letter as an initial action, acknowledging that there are still many important tasks ahead in the upcoming challenges.
During recent crypto hearings in Congress, the cryptocurrency industry, which has traditionally tried to distance itself from partisan politics, became a topic of clear partisan divisions. Republican lawmakers tended to be more supportive of digital asset businesses, while many Democrats aligned themselves with officials from U.S. financial agencies who are skeptical about cryptocurrencies. However, it’s worth noting that there are still instances of bipartisan cooperation on ongoing legislative initiatives.
According to Katz, some lawmakers will persist in supporting the crypto industry, but many hold reservations and lack trust in it. He also mentioned that the industry’s power to shape policies has decreased, particularly with current regulators and Democratic officials.
According to Barron’s, Selkis plans to establish a political-action committee (PAC) with the aim of influencing cryptocurrency legislation. His goal is to raise tens of millions of dollars for this purpose.
Sam Bankman-Fried, the former CEO of FTX, adopted a strategy of showering Congress with crypto contributions. However, assessing the impact of this widespread campaign generosity is difficult, as FTX faced significant issues before the start of Congress’s current session. Furthermore, Bankman-Fried’s donations are now the focus of a federal criminal prosecution, accused of violating campaign-finance laws. This is the challenging environment in which Selkis’ efforts would be taking place.
Brett Quick, the head of government affairs at the Crypto Council for Innovation, mentioned that restoring any harm caused in the past year will require improved communication and fostering a stronger relationship with lawmakers involved in crypto-related matters. Repairing the lost trust will be a lengthier process that requires ongoing efforts.
According to her, there is a widespread acknowledgment in Washington that the FTX collapse was a typical case of fraud unrelated to the technology itself. Meanwhile, industry representatives are facing difficulties as they strive to clarify their goals and intentions. The crisis has emphasized the industry’s demand for regulatory oversight, commonly referred to as a “cop on the beat,” which crypto businesses have been requesting.
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While the ongoing lobbying efforts continue, millions of cryptocurrency users in the United States are keen to ensure that Congress hears their perspective, which is that they want to retain cryptocurrencies within the country and have strong regulations in place. This explains why business leaders are working to generate grassroots campaigns. According to Quick, there is space for both approaches: the traditional interactions of lobbyists in Washington and the initiatives that industry leaders are developing.
“They can coexist,” she said.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
