Crypto firm donations increase as midterms loom

Cryptocurrency firms have drastically stepped up their political donations as the US midterm elections approach, hoping that a new Congress can offer some protection from increased government regulations.

As The Wall Street Journal (WSJ) reported on Saturday (Nov. 5), crypto companies and their workers have made $73 million in campaign contributions this year, compared to $13 million in the 2020 election. This year, the industry also spent $15 million on lobbying, more than it has spent in the last eight years combined.

“These midterms are the most important elections for this crypto community,” Hermine Wong, director of policy at Coinbase, said in the WSJ report. “We believe that the legislators coming into this cycle will finally be able to draft legislation to govern this area.”

Read more: Rep. McHenry: ‘Ugly Baby’ of Stablecoin Legislation Will Grow into a Bill of ‘Practical Consequence’

In October, Rep. Patrick McHenry, RN.C., told PYMNTS’ Karen Webster that regardless of the outcome of Tuesday’s election, stablecoin regulation will be on the agenda when lawmakers return later this month.

The call came after comments by McHenry that haggling between Democrats and Republicans has given birth to an “ugly baby” of tentative guiding principles.

“What we have now is a complicated policy,” McHenry told Webster, “and it’s a complicated piece of legislation — with compromises within … the nature of legislative compromise does not often create something of beauty. It creates something of practical importance. And this is what I am going for.”

Meanwhile, crypto regulations may take longer than people in the industry might like, Michael Gronager, CEO of blockchain data platform Chainalysis, told PYMNTS recently.

“I was part of a lobby group around the Fifth Anti-Money Laundering Directive” in the EU, he said, noting that the construction of a proper regulatory framework began in 2015. “It took four to five years before anything actually became law and rolled out.”

One of the areas that needs the most regulatory clarity, he said, is whether cryptocurrencies are securities and how that classification is defined.

“It’s still a bit of a gray area and it’s something that needs more clarity,” Gronager said, noting that from his point of view “if you look at underlying protocols like bitcoin, like ethereum, like other things, I would clearly call them commodities more than securities.”

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