Across the U.S., a wave of pro-crypto legislation is sweeping through the states. But closer inspection reveals lobbying by crypto companies is behind it.
The New York Times reported that cryptocurrency firms are turning to state legislatures to drive home their agenda for increased adoption. The report noted that since the start of the year, a staggering 153 pieces of cryptocurrency legislation have landed on the desks of lawmakers in over 40 states.
In Jan, Colorado’s governor Jared Polis announced that the state was inching toward becoming the first state to accept taxes in cryptocurrency. He added that it was simply the “next logical step on the path to digital statehood.”
Colorado is far from being the only state with pro-crypto legislation in the making. Florida Governor Ron DeSantis has said that he is working on a plan to allow businesses to pay their taxes using cryptocurrency. And California has introduced a bill to enable citizens to pay for government services with cryptocurrency.
The embrace of cryptocurrencies by these states is not a coincidence as closer scrutiny reveals the working of lobbyist groups across the nation.
In New York, over 10 crypto firms have hired lobbyist groups and are cumulatively spending over $140,000 to steer government policies in their favor.
“Legislators want to be on the cutting edge, on the side of something new,” said Kristin Smith, director of the Blockchain Association. The pro-crypto legislators believe that the ecosystem will create jobs and stimulate their economies as part of their defense for backing the industry.
FTX CEO Sam Bankman-Fried has donated over $5 million to the campaigns of politicians in Washington as his firm sets its hopes on a regulatory soft touch.
Critics fight back against lobbyists
Meanwhile, anti-crypto groups are using the environmental impact of mining as a means of stifling future legislation.
Lee Reiners, an ex-supervisor at the Federal Reserve Bank of New York, said, “There’s no one pushing back saying there are big risks here to your citizens, of money laundering, consumer fraud, and tax evasion.”
His comments were in relation to the growing pro-crypto trend in state legislatures and the work of lobbyists.
Critics have argued that pro-crypto legislation is enriching the key players in the industry rather than the general public.
The New York Times report detailed a story of Caitlin Long, who lobbied for a law that aided banks handling digital assets to receive Wyoming charters. After coming into effect, Long opened Avanti Bank and thanked Wyoming’s Legislature for making the business possible. The bank promptly received a state charter.
“They came in and started writing legislation that really gamed it to their advantage,” said Robert Jennings, who served with Long on a coalition of crypto supporters in Wyoming.
Long said she hadn’t decided to start a crypto bank until months after Wyoming’s legislation passed.