Coinbase Leads Major Lobbying Effort for Crypto Industry
Coinbase Global is spearheading a significant lobbying campaign aimed at garnering support from lawmakers to pass new regulations for the crypto industry. Despite the concerted effort, experts believe that it may be too late to make a substantial impact this year.
Dubbed "Stand With Crypto Day," the event includes a range of initiatives. Coinbase is funding the travel expenses of over 50 crypto company executives to visit Washington, D.C., and engage with lawmakers. In addition, the company plans to station an armored "money truck," essentially a mobile billboard, near the Capitol building.
Coinbase recently launched a nonprofit advocacy group called the Stand With Crypto Alliance with the purpose of advocating for crypto-friendly regulations. Several crypto founders will also attend or stand outside a hearing where Securities and Exchange Commission Chair Gary Gensler is giving testimony to the House Financial Services Committee. Gensler has long criticized the industry, accusing it of widespread fraud, and the SEC has filed lawsuits against multiple firms, including Coinbase, for alleged violations. However, Coinbase vehemently denies these accusations and is actively fighting the SEC in court.
"The idea is to demonstrate that there is more happening in the crypto industry than just companies being sued," explained Coinbase Chief Legal Officer Paul Grewal.
During the summer, House committees made progress on legislation that would introduce new regulations for crypto tokens and platforms like Coinbase. Grewal expressed optimism that the bill could receive a full vote on the House floor as early as November, but acknowledged the realistic possibility that it may not become law this year.
"In this environment, passing comprehensive legislation is challenging, we're having a hard time getting a post office renamed," Grewal stated.
However, Senate Democrats and the White House have yet to exhibit significant interest in advancing the bill into law. On Wednesday, many of the scheduled meetings with lawmakers are with individuals who are not regularly involved in crypto-related committees. This strategy aims to cultivate support by highlighting the potential of crypto as a job creator and an issue that resonates with voters.
Coinbase Takes Crypto Policy Argument to Washington
Mike Peck, co-founder of the education-oriented crypto nonprofit Ed3 DAO, expressed concerns about the lack of regulatory clarity in the current Web3 environment. This has made his organization cautious about issuing a crypto token due to the potential backlash from regulators. However, Peck remains hopeful and plans to attend meetings with lawmakers in Washington to push for more favorable regulations. Coinbase, which has financially supported Peck's organization in the past, is offering to reimburse some of his expenses.
Recent Defeats of SEC Highlighted
As part of Coinbase's advocacy efforts, they plan to emphasize recent victories against the Securities and Exchange Commission (SEC) in court. One notable example is the partial victory of crypto firm Ripple Labs. The judge suggested that most crypto tokens do not fall under the SEC's jurisdiction as securities. Another win was secured by Grayscale Investments, with a panel of judges ruling that the SEC made an error in rejecting the conversion of the Grayscale Bitcoin Trust into an exchange-traded fund. While the SEC is still challenging these rulings, the outcomes provide a glimmer of hope for the crypto industry.
Challenges Ahead
Coinbase's push for favorable crypto policy faces some challenges, including the possibility of a government shutdown looming. Lawmakers are currently focused on averting this shutdown, potentially delaying any progress on legislation. Additionally, election politics are expected to hinder the advancement of major legislation in the coming years, further complicating the situation. Despite these obstacles, Coinbase's efforts this week could lay the groundwork for future initiatives after the 2024 election.
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