Coinbase restarts lobbying campaign to spend nearly $800,000 in Q3 2021

The latest lobbying information revealed that in recent months, the cryptocurrency exchange Coinbase has aggressively stepped up its lobbying efforts.

In fact, the lobbying disclosures in the third quarter of 2021 show that Coinbase has become one of the largest “expenders” in the cryptocurrency field. It is worth noting that the exchange re-registered its internal lobbying program in September. According to information disclosed on October 20, Coinbase’s lobbying spending in the third quarter reached $625,000.

Coinbase restarts lobbying activities, spending nearly $800,000 in Q3 2021

Coinbase Q3. Image source: Senate lobbying disclosure report

The money came from a company that was briefly registered in 2015 for lobbying purposes. According to reports, the company spent only US$55,000 for the entire year before terminating its registration in early 2016.

Subsequently, Coinbase signed a contract with the lobbying company Franklin Square Group for several years and joined the law firm Steptoe & Johnson in early 2021. However, in the third quarter of 2021, there were also lobbying contracts with many new companies, and Coinbase reportedly spent $170,000 on these companies.

Coinbase’s internal lobbying business plus these contracts, Coinbase reported that its lobbying expenditure for the third quarter was $795,000.

A Coinbase spokesperson told The Block:

“Especially in 2021, it demonstrates that the crypto economy is growing exponentially across the United States, and the American people are very concerned about the future of the digital assets they hold. Our public policy agency in Washington, DC is growing to respond to this moment, and Communicate their views in key regulatory debates.”

The Lobbying Disclosure Act requires these documents to be submitted, but its scope is quite limited in terms of what it considers lobbying and who needs to register. It applies to any contact with members of Congress and their staff, as well as senior officials of the executive branch. It is worth noting that it only covers a small number of financial supervisors.

At the same time, lobbying activities are defined as “lobbying for efforts to reach and support such contacts, including preparation and planning activities, research, and other background work, which are intended to be used for contact and lobbying with others. Coordinating activities.”

Within this range, $795,000 does not cover all Coinbase’s broader policy expenditures, including full-time employees focused on this area.

The lobbying road restarts the background

The company still has a lot of work to do in Washington.

As the most watched listed crypto company in the United States, Coinbase has become a core issue of the U.S. Securities and Exchange Commission (SEC) under the leadership of Chairman Gary Gensler. Gensler is eager to extend the SEC registration to cryptocurrency exchanges.

as predicted. In early September, Coinbase CEO Brian Armstrong attacked the SEC’s “doing” on the company’s planned product “Coinbase Lend” on Twitter.

Coinbase wrote an article at the time that the SEC issued a Wells notice against its lending business Coinbase Lend, which was an informal reminder issued by the SEC before a civil lawsuit against a listed company in the United States. Coinbase stated that in the past nearly six months, Coinbase has been actively reporting on Coinbase Lend with the SEC in order to allow its customers to earn interest through Coinbase Lend. Coinbase claims that Coinbase Lend does not meet the securities conditions, nor is it an investment contract or bill, but that users lend their USDC to earn interest. However, the SEC still believes that this is a security and intends to file a lawsuit against it.

Subsequently, on September 20, Coinbase had to announce the cancellation of the plan to launch the encrypted lending project (USDC APY) and stopped the waiting list for this project.

Obviously Coinbase is not willing to remain passive. As the disclosed information shows, Coinbase opened a series of new lobbying contracts and registrations just a few weeks later. Earlier this summer, the company conducted a series of new recruitments on compliance and policy, including the appointment of Faryar Shirzad as chief policy officer.

Just last week, Shirzad announced that the company is vigorously promoting the establishment of a new regulatory agency dedicated to digital assets. The proposed institution is also the core goal of Coinbase’s new lobbying efforts.

Coinbase hopes that the U.S. government will establish a dedicated regulatory agency to oversee the cryptocurrency industry, suggest that Congress pass legislation to regulate the digital asset market (MDA), and create registration procedures for these entities. Coinbase also proposed that the crypto industry establish a self-regulatory organization (SRO) for crypto businesses. The proposal proposes four “regulatory pillars” to guide this process, namely, the regulation of digital assets under an industry-specific framework, the creation of new regulatory agencies, the establishment of fraud protection and disclosure requirements for encryption businesses, and the promotion of interoperability. According to the proposal, decentralized exchanges (DEX) do not meet the conditions of MDA, and regulators will have the power to approve any cryptocurrency other than Bitcoin and Ethereum to be launched or traded in the United States. Coinbase wants Congress to enact new laws instead of relying on “laws drafted in the 1930s” because it “cannot understand this technological revolution.”

Shirzad stated that Coinbase has held more than 30 meetings with the Congressional Office, as well as many meetings with “institutions and administration.” Shirzad said that Congress has shown interest in Coinbase’s proposal, but the timetable for highlighting potential legislation is still unclear. When asked about the SEC’s views on the proposal, Shirzad stated that Coinbase had contacted the SEC, and the SEC “expressed an interest in hearing (Coinbase)’s opinions.”

Posted by:CoinYuppie,Reprinted with attribution to:
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