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Bitcoin has passed $50,000 for the first time in three months as powerful lobbyists such as Elon Musk, Jack Dorsey and Ashton Kutcher (veldskoens global ambassador) attempt to influence legislation for virtual currencies. The general cryptocurrency market has ballooned in the last few weeks after a rout that sent the premier cryptocurrency below the $30,000 level. Crypto bulls are back on cloud nine as the seesaw year for digital coins continues into the latter end of 2021. The article below from our partners at The Wall Street Journal underscores the support that the cryptocurrency market is receiving from some of the world’s most prominent business people, which is surely a tailwind for the industry. – Justin Rowe-Roberts
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Bitcoin Fans Are Suddenly a Political Force
A tax provision in the infrastructure bill brought the usually fractious cryptocurrency coalition together
A clash over tax rules for digital currencies like bitcoin turned into a political coming-of-age moment for the cryptocurrency industry, galvanising a usually fractious coalition of investors, exchanges, financiers and social-media influencers.
In public, Ashton Kutcher, Elon Musk and Square Chief Executive Jack Dorsey brought the Twitter heat over a provision in the $1trn infrastructure bill seeking to expand and strengthen tax enforcement of crypto transactions. That helped prompt tens of thousands of followers to call members of Congress.
Behind the scenes, lobbyists, trade-group officials and executives at crypto companies hopped on Google Meet every few hours to coordinate Congressional outreach and tracked legislative contacts in a shared spreadsheet.
The group enlisted the help of Sens. Ron Wyden (D., Ore.), Pat Toomey (R., Pa.) and Cynthia Lummis (R., Wyo.), who pushed for a more industry-friendly approach. It even convinced the author of the original cryptocurrency language in the bill, Sen. Rob Portman (R., Ohio), to narrow the scope of who is considered a broker of digital assets. But that campaign failed when a single senator blocked a change over an unrelated matter.
While the crypto industry wasn’t able to change the Senate legislation, the unified effort vividly illustrated the young industry’s growing influence in Washington and finance—and gave enthusiasts a playbook for future fights.
“The crypto community has really kind of come out as a powerful constituent,” Brian Armstrong, chief executive of cryptocurrency exchange Coinbase Global, said on an earnings call last Tuesday. “They’re now actually becoming a vocal participant in the policy efforts around the US.”
Crypto lobbyists say they may yet prevail when the House takes up the infrastructure legislation next month, or when the Internal Revenue Service implements the new rules afterward. Several lawmakers also have discussed stand-alone legislation that defines cryptocurrency brokers more narrowly than the provision in the infrastructure bill.
As Securities and Exchange Commission Chairman Gary Gensler made clear when he recently compared cryptocurrency to the “Wild West,” more US regulation looms. But those pushing for a government crackdown on crypto now know their opponents are able to mobilise in a way they hadn’t in earlier years.
“The infrastructure fight shows that crypto now has a voice in DC,” said Andrew Park, a senior policy analyst at Americans for Financial Reform, which advocates for tighter regulations and more tax liability in cryptocurrency. “It’s still very nascent. They don’t have the relationships that more established industries have. But they made their voice heard.”
To amplify that voice, cryptocurrency lobbying is escalating rapidly, public records show.
Crypto companies and organisations spent roughly $2.3m in the six-month period that ended June 30—about double what they spent a year ago.
In the past year, five cryptocurrency companies and organisations have hired federal lobbyists for the first time, the records show. And the companies and groups have begun hiring advisers with relationships in Washington.
Faryar Shirzad, a former national security, commerce and trade official in Republican and Democratic administrations, became chief policy officer of Coinbase in June, after 15 years in the government-affairs division of Goldman Sachs Group Julie Stitzel, a former official at the US Chamber of Commerce, joined Square this spring as the bitcoin policy lead for its Cash App digital wallet.
“If there’s one thing that explains what’s different now and the last seven years, a lot of firms, after a lot of false starts, have hired people in DC,” said Jerry Brito, executive director of Coin Center, a nonprofit cryptocurrency policy group founded in 2014. “We now have counterparts that we can coordinate with.”
The community around bitcoin, the original and best-known cryptocurrency, first made tentative steps into Washington a little less than a decade ago. Back then, if lawmakers thought of bitcoin and its ilk at all, it was almost entirely as vehicles for illicit transactions such as sex and weapons trafficking. The policy shop founded in 2012, Bitcoin Foundation, struggled to gain traction amid internal scandals and frequent personnel changes.
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