- Binance.US formed Binance.US Innovation PAC
- The company spent $720,000 on lobbying in 2022
- Now-bankrupt FTX poured $70 million into 2022 US elections
Following the collapse of FTX, Binance.US has decided to step up its involvement in politics.
The US branch of Binance, the largest crypto exchange in the world, will start its own political action committee (PAC) – Binance.US Innovation PAC.
On Monday, the company filed for registration of the PAC with the Federal Elections Commission. Its treasurer will be Krishna Juvvadi, the head of legal at Binance.US and a former regulatory lawyer for Uber (NYSE:UBER).
Binance did not issue any statements regarding the PAC. However, the timing of the news is raising some eyebrows.
Binance formed the PAC just a month after the congressional race ended. This means that Binance’s PAC has two years to prepare for the next election cycle, including the 2024 presidential election.
However, the PAC was formed as the industry is still assessing the consequences of the FTX collapse. Recently, the investment bank JPMorgan (NYSE:JPM) issued a report stating that the pressure on politicians to regulate crypto has never been higher. The collapse of a major exchange has made crypto regulation an urgent matter for the U.S. legislature.
With the coming regulatory crackdown, crypto firms are ramping up their political expenditures, both on campaigns and lobbying.
Like other major exchanges, Binance.US increased its lobbying spending in 2022. According to Opensecrets, the exchange spent $720,000 on lobbying in 2022, up from $160,000 in 2021.
Binance Latest Among Exchanges to Form a PAC
Another US exchange, Coinbase (NASDAQ:COIN), formed a PAC earlier this year. According to a spokesperson, the Coinbase Innovation PAC will take a bipartisan approach to support “crypto-forward lawmakers.”
The PAC is just a part of Coinbase’s efforts to influence politics. The US exchange ramped up its lobbying spending in 2021 to $1.5 million, up from a previous record of $230,000.
But the biggest political spender was Sam Bankman-Fried’s FTX. Before FTX went bankrupt, its CEO was among the biggest donors in U.S. politics.
FTX.US and its employees donated some $73 million to campaigns in the 2022 elections. Moreover, FTX spent $640,000 on lobbying in 2022, up from just $50,000 in 2021.
Sam Bankman-Fried personally donated $40 million ahead of the midterm elections, mostly to Democrat candidates. Ryan Salame, a senior executive of FTX Digital Markets, donated $21.6 million to Republican candidates.
On the Flipside
- Binance has not disclosed how much money it will put into the PAC.
Why You Should Care
Political contributions could be a factor in shaping the future of crypto regulation, which is crucial for the ecosystem.
Read about Sam Bankman-Fried’s efforts to influence US politics:
Sam Bankman-Fried Revealed as the Biggest Crypto Donor of the U.S. Midterm Elections
Read about the US legislative plans for crypto regulations:
Senators Urge Congress to Move Forward with Finalizing Crypto Legislation