Coinbase Global on Wednesday is spearheading one of the biggest lobbying pushes the crypto industry has tried in a while, an effort to build support among lawmakers to pass new rules for the industry.
For this year, the push might be too late.
The crypto trading platform is calling the event “Stand With Crypto Day” and is taking a multipronged approach. Coinbase is helping to pay to fly more than 50 crypto company executives to Washington, D.C., to lobby lawmakers, according to people familiar with the matter.
(ticker: COIN) also plans to park an armored “money truck”–in effect a mobile billboard—near the Capitol building.
The company last month launched a nonprofit advocacy group, called the Stand With Crypto Alliance, to push for crypto-friendly regulations.
Some crypto founders will also attend or stand outside a hearing on Wednesday where Securities and Exchange Commission Chair Gary Gensler will give testimony to the House Financial Services Committee. Gensler for years has said he believes the crypto industry is rife with fraud, and his agency has sued several firms, including Coinbase, for allegedly violating the law. Coinbase denies the charges and is fighting the SEC in court.
“The idea is to show that there’s a lot more happening out there than crypto companies getting sued,” Coinbase Chief Legal Officer Paul Grewal said in an interview this week.
This summer, House committees advanced legislation that would set new rules around how crypto tokens as well as platforms such as Coinbase are regulated. Grewal said he believes the bill could get a full vote on the House floor as soon as November, but that the company is realistic that the bill might not make it into law this year.
“In this environment, it’s hard to get a post office renamed, let alone comprehensive legislation passed,” Grewal said.
So far, there hasn’t been the level of interest among Senate Democrats or the White House for the bill, called the Financial Innovation and Technology for the 21st Century Act, to move into law.
On Wednesday, many of the companies’ scheduled meetings are with lawmakers who aren’t on the committees that regularly deal with crypto, according to people familiar with the matter. The idea is to build support around crypto as a jobs maker and potential issue for voters.
Mike Peck, who co-founded an education-oriented crypto nonprofit called Ed3 DAO and plans to attend, said a lack of regulatory clarity has kept his organization from issuing a crypto token, for fear of catching the ire of regulators.
“The current climate is not particularly great around Web3 and in particular crypto,” said Peck, referring to the catchall phrase for innovations around crypto, blockchain, and other technologies that supporters say could provide the foundation for an improved internet. “For us, certainly we’ve had to be careful in terms of what partners we engage with.”
Peck, whose organization has received funding from Coinbase in the past, said that though his schedule isn’t set, he planned to arrive in Washington Tuesday evening and attend lawmaker meetings. He said Coinbase is reimbursing some of his expenses.
Part of the push’s message will also be to highlight recent defeats of the SEC in court. Crypto firm Ripple Labs in July scored a partial victory when a judge suggested most crypto tokens aren’t in and of themselves securities subject to the SEC’s jurisdiction.
Then in August, a panel of judges unanimously sided with Grayscale Investments against the SEC, saying that the agency erred when it rejected the company’s bid to convert the
Grayscale Bitcoin Trust
(GBTC) into an exchange-traded fund. The SEC is challenging the Ripple ruling and has until mid-October to challenge the Grayscale ruling.
Coinbase’s push has run into some unfortunate timing, with many lawmakers focused on averting a government shutdown that could begin as soon as Sunday.
Even putting the shutdown aside, most policy analysts believe election politics will get in the way of moving forward with any major legislation in the next couple of years, let alone anything as contentious as crypto policy. Instead, this week’s push could set the stage for efforts after the 2024 election.
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