Ripple Labs spent $690,000 on lobbying in the United States in 2020, which still didn’t save the firm from the Securities and Exchange Commission.
Per legally mandated disclosures for 2020, Ripple’s lobbying program dwarfed those of other firms in the crypto industry. Coinbase, which looks to become the first American crypto exchange to issue public shares, spent $230,000 over the same year, while other exchanges like Binance.US, Gemini and Kraken did not report any spending on lobbying.
Ripple’s spending on lobbying is, however, relatively paltry compared with the giants of Big Tech. Facebook, for example, spent well over $5 million in just the fourth quarter of 2020.
The Diem Association, formerly known as the Libra Association, reported no lobbying activity over 2020, despite the prospective stablecoin issuer’s major struggles with regulators. In the past, it had contracted with the Washington, D.C. offices of law firm Skadden. While the Diem Association has consistently downplayed its relationship with Facebook, Facebook maintained a $200,000 contract with lobbyists at FS Vector over 2020 to focus on blockchain issues.
Ripple was, incidentally, also an FS Vector client. The first half of 2020 also saw Ripple terminate its in-house lobbying team. It now relies solely on contracts with professional firms.
Lobbying activities that Ripple funded were aimed primarily at legislation before Congress like the Token Taxonomy Act and the Digital Commodity Exchange Act. These pieces of legislation set new rules for which digital assets are or are not securities.
Questions of securities law and crypto are obviously critical to Ripple’s business model. The firm had long faced questions as to whether XRP was in fact a security. These questions culminated in the SEC, the securities regulator in the U.S., filing a suit against Ripple Labs near the end of December 2020. In its complaint, the SEC alleges that “the overwhelming majority of Ripple’s revenue came from its sales of XRP, and Ripple relied on those sales to fund its operations.”
Neither Ripple nor FS Vector responded to Cointelegraph’s request for comment. Representatives for Diem declined to comment.