Crypto

K Street’s crypto gold rush continues

With Daniel Lippman

CRYPTO SPENDING KEEPS RISING: Crypto interests nearly tripled their investments in federal lobbying last year compared to the year prior, as the industry welcomed some of the first real efforts from lawmakers to stand up a new regulatory framework for the sector and worked to emerge whole from market turbulence that was capped off by the spectacular collapse of the crypto darling FTX at the end of the year.

— Nearly 60 crypto and Web3 startups as well as more-established companies, trade groups and other heavy crypto players reported pouring $26.6 million into lobbying efforts in D.C. last year, according to a PI analysis of disclosures. That’s up from $9.8 million in 2021, when more than half of those entities hadn’t even begun lobbying or were just beginning to stand up their influence operations in D.C.

Coinbase was the sector’s biggest spender, dropping close to $3.4 million in 2022 versus $1.5 million in 2021. One of the industry’s main trade groups, the Blockchain Association, came in at second with $1.9 million in lobbying expenditures, a $1 million increase from the year before.

— Rival exchanges Binance.US and FTX were among those that ramped up their spending the most last year, along with NFT marketplace Dapper Labs. Binance.US reported spending $1.1 million on lobbying last year, more than six times what the exchange spent in 2021.

— The $720,000 in spending reported by FTX was dwarfed by some of its rivals, but the now-bankrupt exchange sought to curry influence in other ways, including the small army of PR operatives and consultants on the company’s payroll, per The Intercept’s Lee Fang, Ken Klippenstein and Daniel Boguslaw, and the millions of dollars in political contributions at the center of campaign finance charges against founder Sam Bankman-Fried. Of course, all of FTX’s outside lobbying firms dropped the exchange in the days following its implosion.

— Crypto interests lobbied on a variety of issues last year ranging from a sweeping digital asset regulation bill from Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) and an FTX-hyped measure from Senate Agriculture leaders that would give the CFTC oversight of the industry, to possible stablecoin legislation, NFT markets and everything in between.

— If recent filings are any indication, the industry’s stumbles and continued fallout from the FTX collapse won’t put a dent in crypto’s rapidly expanding lobbying footprint — if anything, the renewed drive in Washington to finally stand up a framework for regulating digital currencies could further fuel the gold rush on K Street.

— After Binance.US shook up its lobbying team late last year, the international exchange Binance.com has retained both of the lobbying firms that the U.S. operation cut ties with. Binance retained Ivan Zapien, Aaron Cutler and Chase Kroll of Hogan Lovells in December, and on Monday, the exchange brought on Ice Miller’s Jarrod Loadholt, Meagan Bolton and John Pence — nephew of former Vice President Mike Pence — filings show.

— Meanwhile stablecoin issuer Tether picked Continental Strategy, the firm run by Carlos Trujillo, former President Donald Trump’s ambassador to the Organization of American States, as its first lobbying hire, and the digital asset marketplace Bakkt added its first lobbyists at Steptoe & Johnson.

— Bitcoin miner Riot Platforms just registered its first in-house lobbyist, former Trump press aide Brian Morgenstern, and a16z crypto, the crypto arm of venture capital giant Andreessen Horowitz, registered its first in-house lobbyist this month as well, while the exchange Crypto.com recently engaged a new outside firm.

Happy Tuesday and welcome to PI. Send tips: [email protected]. And be sure to follow me on Twitter: @caitlinoprysko.

PORTER HEADS TO THE VALLEY: Rep. Katie Porter (D-Calif.) will hold a fundraiser in Silicon Valley next month for her newly launched Senate bid, making her the latest critic of tech giants to make the pilgrimage to their cash-flush backyards.

— Porter will headline a fundraiser at the Palo Alto home of Sarah Sands, whose husband is venture capitalist Greg Sands. Like a fundraiser hosted by Sands for Sen. Amy Klobuchar (D-Minn.) earlier this month, the event was organized by the Bay Area fundraising group Electing Women Bay Area, according to the invite. The suggested contribution amount is $1,000.

— Like Klobuchar, Porter backed congressional efforts last year to rein in tech companies, support that immediately positions her in contrast with California’s current Senate delegation, which pushed back against the targeted nature of the legislation, as The Washington Post pointed out. She’s also a protege of Sen. Elizabeth Warren (D-Mass.), who is also a tech critic and has endorsed Porter’s Senate bid.

— Porter has long been a prolific grassroots fundraiser. Her campaign reported raising $25.4 million last cycle, more than former House Speaker Nancy Pelosi and almost as much as new House Speaker Kevin McCarthy, per OpenSecrets — all without accepting contributions from corporate PACs and lobbyists.

ALLEN WON’T FACE CHARGES: “The Justice Department has informed John R. Allen, a retired four-star Marine general, that federal prosecutors have closed an investigation into whether he secretly lobbied for the government of Qatar and that no criminal charges will be brought against him in the case,” Allen’s lawyer told The New York Times’ Adam Entous and Mark Mazzetti.

— “The investigation of General Allen became public in June, when an F.B.I. agent’s application to search his electronic communications was unsealed, possibly by accident. Days after the revelations, General Allen resigned as president of the Brookings Institution, a left-leaning think tank in Washington.”

— “The F.B.I. agent’s application provided a detailed account of a period in June 2017, when General Allen met frequently with Richard G. Olson, a former U.S. ambassador to the United Arab Emirates and Pakistan, and Imaad Zuberi, a businessman with ties in the Middle East. General Allen traveled to Doha, Qatar, during that period.”

— “Federal prosecutors have signaled a particular interest in potential violations involving Persian Gulf nations, which have developed close ties to business and political figures in the United States,” but the decision to close the probe of Allen follows a string of high-profile legal setbacks for the Justice Department while bringing foreign influence cases, which often carry a high bar for prosecution.

— Allen’s lawyer, David Schertler, told the Times that he’d been informed “no criminal charges will be brought against General Allen under the Foreign Agents Registration Act, or any other law, based on, or as a result of, General Allen’s trip to Qatar in June 2017 or the government’s investigation of those events.” He added: “It is deeply unfortunate, unfair and contrary to law that General Allen’s reputation and livelihood were wrongly damaged by the public release of confidential grand jury information.”

DEM AGS OUTRAISE REPUBLICANS: Last summer’s Supreme Court decision overturning Roe v. Wade fueled a record-breaking fundraising year for the Democratic Attorneys General Association, according to numbers shared exclusively with PI. The group, which works to elect Democrats to state attorney general posts across the country, brought in $25.5 million in 2022.

— DAGA slightly outraised its Republican counterpart, the Republican Attorneys General Association, which took in $24.8 million in 2022 and typically has the upper hand in fundraising. But POLITICO’s disclosure of the draft abortion ruling last year, followed by the ruling itself in June, put state attorneys general candidates on the frontlines of abortion access across the country, drove hordes of cash toward Democratic political groups in particular in the immediate aftermath.

— DAGA’s cash haul last year is up from $22 million in 2020 but marks a 56 percent increase for the group over 2018 (the vast majority of attorney general races take place in midterm years). The increase in attention from donors aligns with the steadily expanding clout of state attorneys general in recent years, as state AGs across the board have taken an outsize role in investigations touching antitrust, tech, finance, consumer protection, health care and more — and giving rise to a new cottage industry in law firms across D.C.

RE-UPPING: One of the Cherokee tribes looking to have its delegate seated in the House is determined not to let effort’s newfound momentum be lost amid the change of power atop the chamber. The push for lawmakers to make good on a nearly 200-year-old promise reached its pinnacle at the end of last year, following already historic advances in Native American causes by the Biden administration.

— “Last November, the House Rules Committee held a historic hearing on this issue, with members of both parties expressing their support for this effort,” Chuck Hoskin Jr., principal chief of the Cherokee Nation, wrote in a letter to House Speaker Kevin McCarthy and House Minority Leader Hakeem Jeffriessent Monday.

— Hoksin’s tribe is one of several angling for the House to seat their choice for delegate as a result of a 1835 treaty that led to the brutally forced removal of the tribe by the federal government from its ancestral home to land in what is now Oklahoma. Doing so “is not a Republican issue or a Democratic issue,” he argued. “It is a question of whether the United States will live up to the promises it has made throughout history.”

— Hoskin also contends in the letter that the divided state of the country makes seating a Cherokee delegate all the more imperative — and he positions it as an easy bipartisan win. “It is critical that Democrats and Republicans in Congress work together whenever possible to deliver results for the people they serve,” he said. “Seating the Cherokee Nation Delegate is one such issue where Republicans and Democrats can work together.”

SPOTTED at a fundraiser hosted by BGR Group that raised $900,000 for the NRSC on Monday, per a tipster: Senate Minority Leader Mitch McConnell (R-Ky.), Sens. Steve Daines (R-Mont.), John Thune (R-S.D.), Katie Britt (R-Ala.), Pete Ricketts (R-Neb.), Rick Scott (R-Fla.), Tommy Tuberville (R-Ala.), and Todd Young (R-Ind.); BGR’s Haley Barbour, Dan Murphy, Justin Rzepka, Joe Lai, Erskine Wells, Bob Wood, Robb Walton and David Urban; Robert Fisher of Verizon, Brian Herrington of Scotts Miracle-Gro, Stefanie Holland of Qualcomm, Tony Cirillo of U.S. Acute Care Solutions, Scott Levy of Amedisys, Brooke Donilon of NCTA – The Internet & Television Association, Ashley De Smeth of Grubhub, Missy Foxman of the Entertainment Software Association and Ellen McCarthy of Polaris.

Deloitte has tapped Jason Salzetti to lead its government and public services practice, succeeding Mike Canning. Salzetti is currently a principal at the firm and most recently led Deloitte’s state, local and higher education practice.

Austin O’Boyle is now director of advocacy for Aristotle International. He was most recently senior manager for grassroots advocacy and stakeholder engagement at the National Apartment Association.

Alexandra Dickinson and Hannah Levy were both promoted to partner at Beekeeper Group, and Craig Plazure and Landin Ryan were both promoted to vice president.

— The Securities Industry and Financial Markets Association promoted three of its associate general counsels — Kevin Carroll, Melissa MacGregor and Kevin Zambrowicz — to deputy general counsel.

Marina Torres, a former federal prosecutor and candidate for Los Angeles city attorney, has joined Willkie Farr & Gallagher as a partner in the law firm’s white collar defense practice.

— Retired Air Force Gen. John Hyten has joined Pallas Advisors as a senior principal. He was previously vice chair of the Joint Chiefs of Staff.

— The North American Millers’ Association has hired Molly Miller as vice president of regulatory and technical affairs. NAMA also brought on Stephanie Grunenfelder as international trade consultant and promoted Kim Cooper as senior director of government affairs.

Josh Cartin is now a partner at strategic advisory and risk intelligence firm TD International, where he will focus on Asia. He most recently was chief of staff at the Global Engagement Center at the State Department.

Gabriela Melendez-Olivera is now director of strategic communications for external affairs at Bitwise Industries. She previously was strategic communications director at the ACLU.

BMW Victory Committee (Reps. Jack Bergman,Lisa McClain,Tim Walberg)

None.

Alston & Bird LLP: Future Of Pharmacy Coalition LLC
Boundary Stone Partners: Regrow
Capital Park Partners LLC: United Protective Technologies, L.L.C.
Constantinople & Vallone Consulting LLC: Qualtek LLC
Donovan Strategies LLC: Antenna Research Associates
Fgs Global (US) LLC (Fka Fgh Holdings LLC): Community News Media LLC (On Behalf Of Standard General)
Ice Miller LLP: Binance Holdings Limited
Invariant LLC: Klarna Inc
J M Burkman & Associates: Donghua Sun
Nextnav Inc.: Nextnav Inc.
Olsson, Frank, Weeda, Terman & Matz, Pc: American Pistachio Growers (Formerly Known As Western Pistachio Association)
Powers Pyles Sutter & Verville, P.C.: Aria Care Partners
Spinnaker Government Relations Fka C.H. Fisher LLC: Trinity Repertory Company
Steptoe & Johnson LLP: Bakkt Holdings, Inc.
Steptoe & Johnson LLP: Northern Dynasty Minerals, Ltd.
Wake Forest Baptist Medical Center Affiliate Of Advocate Health: Wake Forest Baptist Medical Center Affiliate Of Advocate Health

Big Fire Law & Policy Group, LLP: Oglala Lakota Housing Authority
Govbiz Advantage, Inc.: Harley-Davidson
Mr. Sebastian O’Kelly: Robertson Monagle & Eastaugh (Formerly Hoffman Silver Gilman & Blasco)
Mr. Sebastian O’Kelly: Sportfishing Association Of California
Susan Stohr: Jamestown Board Of Public Utilities
The Ob-C Group, LLC: Ant Group Company Ltd,
Zirkelbach Strategies: Amag Pharmaceuticals

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