Coinbase is launching an independent nonprofit organization for advancing pro-crypto legislation through Congress, hoping to build on recent legislative and legal wins for the digital asset industry.
The Stand with Crypto Alliance is America’s first independent advocacy group for the crypto community, Coinbase says.
The organization’s primary mission is to mobilize support for legislation that would create a US regulatory framework for digital assets — something of a sore subject in the feud between crypto advocates and US regulators, who have fundamental disagreements about how the industry should operate.
“I think a few politicians are seeing crypto as an easy shot to take,” Faryar Shirzad, Coinbase’s chief policy officer, told CNN Business. “I don’t think they have fully understood the passion and the community behind it.”
Crypto advocates have been locked in an awkward dance with the US government over the past year. Since the collapse of FTX — a onetime industry leader co-founded by Sam Bankman-Fried that’s now the center of a massive federal fraud investigation — regulators and lawmakers have taken a harder line against the entire world of digital assets.
Crypto regulation: Questions of who and how
A central sticking point is the question of how crypto tokens should be regulated. The Securities and Exchange Commission, Wall Street’s top cop, contends that most crypto products are investment contracts and therefore fall under its jurisdiction — an argument the crypto industry is fighting.
In June the SEC escalated its enforcement campaign when it sued both Coinbase and Binance, the world’s top two crypto exchanges, saying the companies are illegally selling securities on unregistered exchanges.
At the same time, crypto has scored some crucial legislative and legal wins. Last month, a judge ruled that a token issued by Ripple Labs was “not necessarily a security on its face,” partially validated the crypto industry’s contention that digital assets should not be regulated as securities.
In another victory for the industry, the House Financial Services Committee advanced a bipartisan bill that would clarify the SEC’s jurisdiction and give primary regulatory oversight of crypto to the Commodity Futures Trading Commission.
Coinbase is trying to build on that momentum. ‘Recess is over’
The Stand With Crypto Alliance aims to mobilize “the full force of the decentralized crypto community to tell lawmakers: Recess is over,” Shirzad wrote in a blog post announcing the nonprofit. “America’s crypto constituency is strong — and will be holding them accountable this fall when Congress votes on common-sense legislation to protect consumers and their right to crypto.”
Crypto adoption has been growing, though it remains far from mainstream and still lacks obvious use cases for most people. The promise of crypto, broadly, is a world in which financial transactions can be executed instantly, free of charge. Advocates envision blockchain, the infrastructure on which crypto is built, as the future of all global finance.
But a string of high-profile bankruptcies and frauds have slowed progress and tainted the industry’s reputation.
The Coinbase-backed nonprofit is an outgrowth of Crypto435, an earlier Coinbase campaign to try to organize the crypto community around legislative issues.
“We found ourselves kind of overwhelmed, to be honest, by the level of response that we’ve gotten” to Crypto435, Shirzad said. Across all 435 congressional districts, “the amount of energy and and motivation that we’re seeing among the group is enormous, and so we thought we need to evolve this thing.”
