Coinbase Extends Lobbying Fees – The Cryptonomist

It is precisely among the challenges facing the cryptocurrency industry that there is the issue of regulation and new laws being enacted, which could brighten up or at the same time ruin the business activities carried out by cryptocurrency exchanges.

In this regard, Coinbase in 2022 spent $3.39 million to influence policies in their favor.

Coinbase dramatically increases lobbying spending over the past 6 years

Lobbying is often labeled as trivial corruption by those unfamiliar with the concepts of participatory democracy.

This type of activity is protected by the US Constitution and occurs in secret manners in every country.

One thing is paying bribes to obtain favors and targeted political actions to illicitly benefit the business of certain corporations, which was recently carried out by the criminal Sam Bankman Fried.

Another thing concerns the creation of public campaigns by individuals or organizations to influence the decisions of public officials in favor of their agendas.

The spending that cryptocurrency exchange Coinbase has incurred in recent years to get elected officials to approve specific actions has grown a lot in the past 6 years.

It is enough to think that in 2017 Coinbase spent “only” $80,000 on this kind of activity, while in 2021 it spent about $1.52 million until 2022 when the figure reached and exceeded the $3 million mark.

This is an increase of 4137% in the last 6 years. A frightening figure, but one that when compared to the growth that the exchange has experienced in terms of earnings and reputation becomes irrelevant.

In fact, considering that in 2022 Coinbase had revenues of $3.19 billion, the lobbying expenses incurred by the American company amount to 0.1% compared to the money that entered their coffers in the entire year.

Beyond that, it remains interesting to see how proportionally the spending on this kind of activity grows by leaps and bounds year after year.

In 2022, Coinbase used as many as 32 lobbyists, including 26 revolvers i.e., individuals working in the public sector who decide to take jobs with lobbying firms.

In addition to Coinbase, other crypto companies have also increased their lobbying spending

Coinbase is not the only crypto-friendly company that spent a lot of money on lobbying expenses in 2022.

While ranked number one for spending on influencing political decisions, there are a number of other companies that can boast million-dollar numbers in this context.

Immediately after Coinbase, we find the Blockchain Association, which spent $1.9 million in 2022 by hiring 18 lobbyists including 12 revolvers.

The company is trying to promote the use of blockchain technology by influencing US national policy to increase its market share.

Within the board we find projects such as Uniswap, Ledger, Kraken and Filecoin.

In third position, we find RobinHood, a company that offers online stock and crypto trading services, which in 2022 spent $1.84 million hiring 20 lobbyists including 12 revolvers trying to obtain favorable regulations for the unrestricted buying and selling of cryptocurrencies.

It is worth considering that in the first quarter of 2023, the trading of Dogecoin, whose logo is currently appearing in place of the blue bird on the social media Twitter, drove the Robinhood platform’s revenues, accounting for about 17% by itself.

Fun fact: Remember the bubble that burst on Game Stop’s (GME) stock in which many investment funds were in danger of going out of business due to the severe “short squeeze” caused by a myriad of small traders? Well it started precisely from Robinhood‘s platform.

In the image below you can see the top 15 companies that have spent the most in the past year on crypto lobbying.

What would happen if the US banned the possession and use of cryptocurrencies?

What could happen if all these attempts to influence policies in the cryptocurrency sector do not bring the expected results and if instead the United States of America bans the use and possession of cryptocurrencies?

This is a very sensitive issue to which it is not possible to give a dry answer.

Let’s say that there are opposing forces on the hypothetical crypto ban in the US.

While the activities of lobbyists continue on their path, there are US politicians, such as Senator Elizabeth Warren, who have made explicit publicly their desire to eliminate all kinds of cryptocurrencies from the financial landscape.

Surely we can say that if crypto assets were banned in the US, it would generate a great feeling of discouragement worldwide.

In fact, the US is one of the most important economic hubs in the world, and numerous other nations follow their directives and policy decisions hand in hand.

This could be a big problem for US cryptocurrency exchanges such as Coinbase, which would have to cancel all their operations in the country and possibly consider moving abroad.

Economically underdeveloped countries such as El Salvador, for example, represent an area where regulations work in favor of the crypto sector.

Only a few days ago, the president of the Central American country, Nayib Bukele announced that all taxation related to technological innovation (including everything revolving around Bitcoin) will be removed in order to encourage economic growth in the country.

However, this still remains only a nightmare far from reality, and indeed the businesses of exchanges such as Coinbase continue to thrive and there are no obvious dangers that need to be immediately addressed.

In this sense, lobbying activities serve precisely to make sure that the crypto ban remains only a distant mirage.

There is also to consider that, even in the event that the US really does ban the ownership and exchange of cryptocurrencies, and exchanges such as Coinbase cease their activities, the alternative of self custodial and anonymity still remains viable.

In fact, Bitcoin was built precisely to be resilient to censorship, making it impossible to replicate what President Roosevelt did on 5 April 1933, when he issued Executive Order 6102 prohibiting the possession of gold to preserve the stability of the dollar.

In this sense, the digital gold Bitcoin is safe and will remain safe forever if stored through personal wallets.