Friday, January 21

Bitcoin exchanges spent $ 5 million to pressure the US government.

Key facts:
  • 2 days ago, CEOs of several companies appeared before Congress.

  • The main requirement of companies is to demand clear regulations for cryptocurrencies.

The companies of the bitcoin (BTC) industry and cryptocurrencies in the United States continue in the fight to achieve an optimal regulatory ecosystem to operate. In this case, it was learned that some of the main companies in the sector had invested around USD 5 million in lobbying, to pressure, in a certain way, the creation of a regulatory framework.

In a reportage Published this December 10 by The Economist on the recent political movements that crypto-active companies have been exercising, it was known that companies such as Coinbase and Block (the latter led by Jack Dorsey, founder of Twitter) have allocated funds to political campaigns and even to promote initiatives in the United States Congress.

This information is closely related to what happened on December 8. That day, CEOs of six companies in the Bitcoin industry declared before Congress their demands for a clear regulatory framework in the field of cryptocurrencies.

For now, the United States does not have a specially developed legal framework for cryptocurrencies. While several crypto-asset products have been approved, including the first bitcoin futures exchange-traded funds, there is still no legal framework that defines the rules of the game.

The Secretary of the Treasury Department, Yanet Yellen, has said that cryptocurrencies such as stablecoins must be strictly regulated. Source: Twitter.

This road ahead has led companies to increase their investment in moving influence. As reported by The Economist, the amount allocated to lobbying quadrupled in size compared to the fourth quarter of 2020.

America is not China, regulators say

Perhaps one of the fears of companies is that the United States could go the way of China and veto Bitcoin from the country. Although, at the beginning of October of this year, the president of the SEC, the entity in charge of regulating the trade of financial products, confirmed that the country would not ban the use of bitcoin and other crypto assets, as reported by CriptoNoticias.

While this is a position of the SEC chair, the lack of a firm regulatory framework has led companies to navigate a sea of ​​uncertainties.

For example, months ago, Coinbase received threats of a lawsuit from the SEC, following the launch of “Lend”, a cryptocurrency credit service. The reason was that the product qualified as a “security” and, therefore, the company had to have an enabling license to offer it.

These examples demonstrate a “push and pull” between companies and regulators. For now, it remains to be seen what will be the results of these pressures that companies are currently exerting.