Mon. Aug 15th, 2022
Source: AdobeStock / slexp880

Crypto lobbyists are making breakthroughs with adoption-focused legislation at the state level in various parts of the USA – with federal regulation still lagging behind.

Per a report from the New York Times, in the Florida House in March, legislators “swiftly gave final approval” to a bill that makes it easier for residents to trade crypto, “eliminating a threat” from a law that had sought to “curb money laundering.”

The lobbyists’ efforts were evident when, the media outlet reported, “two House members stood up to thank crypto industry ‘stakeholders’ for teaming with state officials to write a draft of the bill.”

The New York Times stated that it had conducted a “review of state legislative proposals and interviews with legislators and their industry allies” and found that “similar teamwork” had yielded results in states such as Wyoming, North Carolina, Illinois, Mississippi, and Kentucky, with “at least 153 pieces of cryptocurrency-related legislation” pending in 40 states and Puerto Rico, per National Conference of State Legislatures data.

Not all of these have been “influenced by the crypto industry,” but the media outlet noted that “some bills have used industry-proposed language almost word for word,” with a bill pending in Illinois “lifting entire sentences from a draft provided by a lobbyist.”

The media outlet noted that “at least a dozen” crypto industry firms have hired lobbyists in the past 12 months, including heavyweights like the wallet provider Blockchain.com and the brokerage Paxos (PAX). Collectively, firms in the state have spent over USD 140,000 a month on their lobbying efforts.

The contents of the bills include proposals to exclude crypto from securities laws that date back to the early 1930s, as well as a few more “radical” bills including an Arizona House member’s efforts to have bitcoin (BTC) granted legal tender status.

The New York Times being the New York Times, however, was quick to give column space to detractors and critics, with one former supervisor at the Federal Reserve Bank of New York quoted as stating:

“States are being convinced you have to do this if you want to be competitive, so they’re rolling out the red carpet for crypto firms. There’s no one pushing back saying there are big risks here to your citizens, of money laundering, consumer fraud and tax evasion.”

The media outlet pointed out that many state legislators had “limited background in financial regulation,” and thus had “little choice but to rely on industry experts, given the complexity of the crypto marketplace.”

The media outlet also alleged that “the architects of the proposals have moved swiftly to profit on” some of the laws they have worked on.

It gave the example of Kentucky, which last year passed bills including tax incentives for crypto miners. One of these bills, the media outlet noted, was sponsored by Brandon Smith, the head of the State Senate’s Natural Resources and Energy Committee.

The New York Times noted that “a few months after the bill passed,” Smith had joined forces with the crypto mining hardware firm Bitmain to “propose a Kentucky-based repair center for mining equipment, a project he has since abandoned.”

Smith was quoted as stating that he did not consider his “work in the industry” to be a conflict of interests, “given that he had not applied for the tax credits his law created.”

Regardless, crypto community members welcomed the news that lobbying appeared to be paying off in many cases.

The Castle Island Ventures Partner and bitcoin advocate Nic Carter claimed that the moves were proof that “federalism is working as intended,” and has previously tweeted – somewhat prophetically:

“It will become very clear in the next few years that the federal nature of the United States is bitcoin’s greatest ally. The United States won’t have ‘a policy’ on bitcoin, it will have 50 different policies.”

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