Since the beginning of the year, there’s been a lot of regulatory pushback against bitcoin and crypto.
- The U.S. Securities and Exchange Commission (SEC) has sued major exchanges like Coinbase and Kraken.
- The Commodity Futures Trading Commission has brought charges against crypto behemoth Binance for allegedly knowingly offering unregistered crypto derivatives products in the U.S.
- In Congress, Democratic Sen. Elizabeth Warren of Massachusetts and her “anti-crypto army” are working on legislation to kill the industry…
- And the Biden administration is proposing an insane 30% tax on bitcoin miners.
This type of “techlash” isn’t new. It happens every time a disruptive technology threatens entrenched interests.
We saw it in the early 1800s when Luddites smashed mechanized looms they thought threatened their jobs.
We saw it at the turn of the 20th century against the automobile, when some cities passed “red flag” laws that required a person to walk in front of “horseless carriages” waving a red flag.
Today, we see it as politicians call for greater regulation of social media companies like Alphabet, Meta, and TikTok.
Eventually, those industries created interest groups that fought on their behalf and paved the way for mass adoption. We’re seeing the same happen today in Web3.
Taking the Political Fight to Washington
Late last month, I attended the Consensus 2023 conference in Austin, Texas.
Consensus is one of the world’s largest, longest-running, and most influential gatherings of the crypto and Web3 communities. There’s always some major announcement coming out of the event.
One of the biggest came from Franklin Templeton. It’s a 75-year-old global investment firm with $1.4 trillion in assets under management.
At Consensus, it announced it will launch the first U.S.-registered mutual fund to use the blockchain to process transactions.
Other major announcements came from global investment firm KKR and global ETF issuer WisdomTree.
Both are traditional Wall Street titans with billions of dollars’ worth of assets under management. And both are launching new products on the blockchain.
The key takeaway here is that even after a year of terrible news in the cryptosphere, institutional money is starting to come back in.
But what really got me excited is what’s happening on the political side…
One of the biggest advocates of building a Web3 lobbying effort is Ryan Selkis, the CEO of popular crypto data and research company Messari.
Selkis is a founder of the Blockchain Association (BA). The group includes big-name members such as Ripple, Genesis, Dapper, Digital Currency Group, Kraken, and Circle.
Late last year, the association announced it will launch a political action committee (PAC). By its nature, crypto is non-partisan. So the PAC will endorse political candidates across the spectrum who support crypto.
In the past, Selkis said he’s seeking to raise $100 million for the PAC. At Consensus, he reaffirmed his goal to build a political war chest.
To put that in context, last year the crypto industry spent nearly $22 million on federal lobbying, according to the website OpenSecrets.
The crypto industry’s current outlay is less than 10% of the $372 million spent last year by the pharmaceutical lobby — the single biggest lobbyist.
But that $22 million is nearly half of what commercial banks spent on lobbying, and more than twice as much as what both the hotel and restaurant lobbies spent.
