Crypto firm BlockFi hires Arnold & Porter lobbyists after record SEC fine

Signage is seen outside of the law firm Arnold & Porter at their legal offices in Washington, D.C., U.S., May 10, 2021. REUTERS/Andrew Kelly

June 10 (Reuters) – Crypto lending platform BlockFi, which earlier this year paid a record fine to the U.S. Securities and Exchange Commission to resolve regulatory charges, is the latest company in the nascent digital currency industry to hire lobbyists.

The company has tapped a five-person policy team with law and lobbying firm Arnold & Porter Kaye Scholer, including partner Mark Epley and legislative and public policy practice group chair Kevin O’Neill, according to a federal lobbying disclosure this week.

The team will work on “regulatory and tax policy for financial service providers in digital assets,” the filing said.

Crypto has been a growing area of lobbying, with industry groups sprouting up to advocate for digital currencies and related services. The crypto industry spent $9 million on lobbying in 2021, according to a March report from Public Citizen.

Arnold & Porter’s Epley said industry associations can play an important role in such efforts, especially when it comes to speaking publicly about the industry’s interests, but policymakers are interested in hearing from individual players in the market. He said his firm will be able to serve as BlockFi’s “alter ego” in such talks.

He said that while the firm has clients that are interested in digital assets, Arnold & Porter is not registered to lobby for any other crypto company.

A spokesperson for BlockFi said the company is “eager to engage” with policymakers to help define the regulatory and tax environment for digital assets. “BlockFi believes that key to the success of the industry is appropriate regulation,” the spokesperson said.

A BlockFi subsidiary in February agreed to pay $100 million to the SEC and 32 states to settle charges that it violated rules by offering an interest-bearing lending product without registering it with regulators. BlockFi did not admit or deny the SEC’s findings, but at the time called the settlement an example of the firm’s “pioneering efforts in securing regulatory clarity for the broader industry and our clients.”

Other law firms have registered to lobby for crypto companies. Coinbase Inc, a digital currency exchange, has hired lobbyists at Wilmer Cutler Pickering Hale and Dorr and Steptoe & Johnson. Both firms reported no lobbying activity for the company during the first quarter of 2022. Coinbase previously hired Mayer Brown, but that relationship ended in October 2021, according to a filing last month.

Read more:

Crypto firm BlockFi to pay record penalty to settle U.S. SEC, state charges

Coinbase expands lobbying network by hiring WilmerHale veteran

Reporting by Jacqueline Thomsen

Our Standards: The Thomson Reuters Trust Principles.