Key Points
- Robinhood led crypto companies in lobbying spending in the first quarter of this year, contributing $610,000 in lobbying expenses before laying off 9% of its full-time staff.
- Coinbase increased its overall spending despite reducing political donations by 62% from the prior quarter; the company laid off 18% of its workforce after running a high-profile Super Bowl ad.
- Overall crypto political spending in Q1 2022 rose slightly compared with the prior quarter, despite the market downturn.
- The top five companies contributed roughly $1.8 million in total political spending.
A pivotal U.S. midterm election is approaching, with Democrats and Republicans contending for control of the Senate. Examining this year’s political spending shows that cryptocurrency companies are increasingly engaging in the political arena. Even amid falling market prices, mass layoffs, and reduced trading volumes across the sector, many firms have allocated significant funds to lobbying and political activity this year.
Robinhood-Led Political Contributions
Robinhood announced in April that it would lay off 9% of its full-time employees, citing the market slowdown that hit both crypto and stock brokerages. Still, the company gave $610,000 to lobbying efforts in the quarter — a 42% increase from the $430,000 it spent in Q4 2021 — making it the largest lobbying donor among cryptocurrency companies that quarter.
As shown in the chart below, the Blockchain Association, Coinbase, Ripple Labs, and Dapper Labs were among the top five spenders as well.
Looking at the totals, Q4 2021 and Q1 2022 were relatively even in aggregate contributions. Bitcoin traded near an all-time high of roughly $68,000 in November 2021, yet despite a downturn in sentiment by Q1 2022, political spending remained strong — a noteworthy development given the market environment.
With a full bear market emerging in Q2 2022, it is expected that industry spending will decline as the next quarter’s figures become available.
Drilling down to individual companies reveals notable quarter-over-quarter shifts. Robinhood’s increase stands out, while Coinbase moved in the opposite direction.
The well-known exchange was the largest donor in Q4 2021, contributing $740,000, but its donations fell by 62% in Q1 2022. That decline came after Coinbase spent an estimated $14 million on a one-minute Super Bowl advertisement in February; four months later, the company laid off roughly 18% of its workforce, or about 1,100 employees.
With the midterm elections approaching, lobbying activity has drawn increased attention. Historically, political spending rises as elections near, but the recent layoffs and market downturn indicate the crypto industry is facing significant headwinds this year.
Whether firms can sustain this level of lobbying expense is uncertain. Many will be watching to see if layoffs deepen or if spending levels hold steady.
Source
OpenSecrets.org