A group of San Francisco-based FinTech firms is forming a coalition to weigh in on regulators and lawmakers concerning cryptocurrencies. The lobby group they have chosen to advise and help them frame their argument will receive payment both in fiat currency and digital coins.
The Push for Constructive Oversight
The coalition of the financial technology firms known as Securing America’s Internet of Value (SAIV) coalition seeks to lobby the lawmakers and the regulators in a bid to influence cryptocurrency and blockchain regulation.
The firms in the coalition are led by Ripple, a software company offering digital payment solutions to financial companies. The other companies include RippleWorks foundation, Hard Yaka, a crypto investment firm, PolySign, a company offering crypto custody solutions, and Coil, a digital payments company.
All the companies in the coalition have resolved to retain Klein/Johnson, a Washington-based bipartisan lobby group, to advise them on how to proceed with their push to the government. The lobby group has immense experience in both technology and financial services. For compensation, Klein/Johnson will receive $25,000 per month and an additional payment of 10,000 XRP.
The levels of government targeted by the coalition are the Congress, the Securities and Exchange Commission (SEC) who are market regulators, and the Internal Revenue Service (IRS).
Government’s Concern on Crypto Dealings
Currently, regulators and lawmakers are in the process of figuring out appropriate federal rules to apply to the crypto economy. The main concerns the government has of the digital tokens and the underlying blockchain technology are threefold.
First, the crypto markets have been recording massive price swings. This has made legislators call for regulations to help curb against the ‘Wild West’ phenomenal.
Secondly, there has been a spate of fraudulent coin offerings which have pushed the SEC to create a website to help warn investors against such scams. In addition, the regulator has brought several fraud cases against firms operating initial coin offerings.
The third concern is that the crypto market is being exploited by individuals and companies to perpetuate criminal activities such as drug dealing. The fact that cryptocurrencies are natively digital has made them a choice payment method for cyber criminals when using ransomware.
SAIV, on the other hand, is pushing for a kind of government oversight that enhances innovation as opposed to impending competition in the crypto markets.
Why Ripple is Advocating for Crypto Policy Change
Ripple has had multiple lawsuits filed against them for allegedly manipulating XRP price. XRP is a digital asset existing independently from Ripple but closely associated with the company. Apart from the lawsuits, Ripple has also been embroiled in a debate on whether XRP should be classified as a security or not. The company holds that XRP is not a security and should be treated in the same manner as bitcoin and Ether.
The executive chairman of Ripple, Chris Larsen, has noted that a lot of misinformation exists about cryptocurrencies and blockchain, partly because of the complexity of the technology. However, he is upbeat that the payment of Klein/Johnson will give the regulators and lawmakers a taste of the industry in a way that drives the point home.