Head companies are hiring compliance consultants, and the crypto industry is beginning to turn to "K Street."

This article was published by BitpushNews, author: Eric Lipton, translated by: Amy Liu.

According to The New York Times, as the struggle over how to regulate digital currencies intensifies, companies using digital currencies are turning to "K Street," rushing to hire well-connected lobbyists, lawyers, and consultants.

K Street is a major thoroughfare in Washington, D.C., known as the center for many think tanks, lobbying groups, and advocacy organizations. In political discourse, "K Street" has become a metonym for the lobbying industry in Washington.

At the end of last year, federal regulators accused one of the world's most popular cryptocurrency platforms, Ripple Labs, of illegally selling $1.38 billion worth of digital currency to investors, marking a critical moment in the crackdown on this rapidly growing market.

Ripple has recruited lobbyists, lawyers, and other well-connected advocates to file lawsuits against the U.S. Securities and Exchange Commission (SEC) and other agencies, making it one of the first major legal battles over what restrictions and requirements the government should impose on the trading and use of digital currencies.

Ripple has hired a consulting firm whose staff includes former aides to Hillary Clinton and former President Donald Trump to help it strategize in Washington. To shield itself from the SEC's influence, the company also hired Mary Jo White, who previously served as the chair of the SEC during the Obama administration.

The article notes that as the Biden administration begins to formulate policies, it could shape the trajectory of a potentially revolutionary industry. The crypto industry is rapidly entering the mainstream and attracting increasing attention from financial regulators, law enforcement agencies, and lawmakers, with Ripple being just one of many cryptocurrency companies vying for influence in Washington.

At a meeting last month, Perianne Bull, president of the digital lobbying group the Chamber of Digital Commerce, welcomed other industry lobbyists, executives, and two House members, stating, "A structural shift is happening. If we don't start planning and taking action soon, we will face all the risks."

So far, cryptocurrency has been a highly volatile investment, but it has begun to change the way individuals, companies, and even some central banks operate. Companies like Ripple operate cryptocurrency platforms that allow customers to make nearly instantaneous global payments through a system that primarily operates outside of government currency networks.

Globally, the total value of all prominent cryptocurrencies has surged from about $200 billion two years ago to approximately $2.4 trillion.

As the stakes rise, there is also a growing recognition of the industry's future, prompting a rush to bring in well-connected advocates.

The advisory board of the Chamber of Digital Commerce is filled with former federal regulators, including former Congressman and newly appointed chairman of the Commodity Futures Trading Commission J. Christopher Giancarlo, who has been appointed to the board of BlockFi. BlockFi is a financial services company attempting to connect cryptocurrency with traditional wealth management institutions.

Democrat Max Baucus, former chairman of the Senate Finance Committee, and Jim Messina, a former senior advisor to Obama, have recently taken on senior roles in the industry.

Data shows that as of early 2021, there were at least 65 contracts involving industry affairs related to digital currencies, cryptocurrencies, or blockchain, up from about 20 in 2019. Some of the organizations spending the most on lobbying include Ripple, the largest cryptocurrency exchange in the U.S., Coinbase, and trade organizations like the Blockchain Association.

Jay Clayton served as SEC chairman until December of last year and is now a paid advisor to the hedge fund One River Digital Asset Management.

Binance.US hired Brian P. Brooks as CEO this month; before January, Brian served as acting head of the Office of the Comptroller of the Currency.

Ripple's new lobbying firm includes one recently founded by Republican K. Michael Conaway. Until this year, Conaway had served as a congressman from Texas and helped push legislation supporting cryptocurrencies last year.

Other firms working for Ripple include Teneo, led by former Clinton aide Declan Kelly, which has enlisted former senior Treasury official Tony Sayegh from the Trump administration to help formulate Ripple's communication strategy in Washington.

The cryptocurrency industry has a long list of lobbying targets, detailed in an eight-page letter to Biden in March, calling for the government to finalize a clear set of policies and adopt a "light-touch regulatory approach."

The article notes that regulatory issues are at least related to two key aspects of the cryptocurrency industry: the so-called tokens, or currencies like Bitcoin themselves; and platforms like Ripple that allow for quick transfers using these cryptocurrencies or trading them, such as Coinbase.

Industry leaders have some hope that the Biden administration will provide more support than the Trump administration, as the new SEC chair Gary Gensler previously taught a course on blockchain technology at MIT.

At a hearing in March, Gensler stated that cryptocurrencies bring new thinking to the payments and financial inclusion sectors. However, he indicated that he would seek to balance encouraging the growth of new financial technologies with protecting investors.

Treasury Secretary Janet L. Yellen expressed deep concerns about Bitcoin, stating, "It is a highly speculative asset, and I think people should be wary; its volatility can be extremely high."

This month, the U.S. House of Representatives passed a bill supported by industry lobbyists to establish a working group composed of federal regulators, industry executives, investor protection organizations, and other entities to study potential frameworks for regulation.