07-29-2025 
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Digital asset lobbyists are descending on Washington, while the crypto kids aren’t making nice with their new Wall Street rivals.
- Crypto lobbying Q2 surge
- Winklevii v JPM
- CFTC nominee Quintenz can’t catch a break
- Senate Dems have questions re crypto mortgages
- Crypto lending: “microfinance on steroids”
The more welcoming reception given to digital asset operators on Capitol Hill has led to a surge in the number of lobbyists looking to advocate for their crypto clients. The Hill reported that “at least 73” crypto companies/advocates filed disclosures acknowledging their spending during the three months ending June 30. “At least 27” of these were filing their first lobbying disclosure forms this year.
All told, crypto-focused companies spent $11.4 million in Q2, with the newbies accounting for $2.8 million of that sum. (Bloomberg reported a smaller overall crypto spending figure, but nonetheless noted that it was 21% higher than its Q1 total.)
The Hill’s overall figure doesn’t include a combined $1.6 million in lobbying by venture capital group Andreesen Horowitz (a16z) (NASDAQ: ZADIHX) and Wall Street investment firm Blackrock (NASDAQ: BLK), both of which have significant crypto interests but also lobby on a range of other financial matters.
Among those new to the crypto lobbying party was KuCoin, the Seychelles-based digital asset exchange that blocked U.S. customers in January after reaching a $300 million settlement with the Department of Justice (DoJ) for operating an unlicensed money transmitting business. KuCoin spent $1 million lobbying in Q2, presumably looking for a way back into the U.S. market, although its settlement imposed a two-year timeout.
KuCoin’s outlay topped that of U.S. exchanges Coinbase (NASDAQ: COIN) ($970,000) and Crypto.com ($430,000), as well as the Blockchain Association ($490,000). The Solana Policy Institute, a group that launched on March 31, spent $560,000, while another newcomer, Gala Games (co-sponsor of this year’s White House’s Easter Egg Roll), spent $50,000.
Another lobbying newcomer, the Polymarket prediction betting site, spent $90,000 on lobbying (under the name Blockratize). It appears to have been money well spent, as the company announced last week that it was returning to U.S. shores following the $112 million acquisition of U.S.-licensed derivative exchange and clearinghouse QCEX.
The period in question doesn’t include the immediate run-up to the mid-July passage of three crypto-focused bills by the House of Representatives, including the stablecoin-focused GENIUS Act, which Trump signed into law on July 18. Given the last-minute drama that saw House Republicans threaten to withhold their support without some guarantee that the Senate would approve their central bank digital currency (CBDC) prohibition, the Q3 total may exceed Q2’s total.
Ahead of the passage of those bills, the crypto-focused Fairshake political action committee casually announced/warned that it had amassed a $140 million war chest to be deployed ahead of and during the 2026 midterm elections and would be watching closely how pols cast their votes.
Politico quoted Bartlett Naylor, financial policy advocate at the non-profit group Public Citizen, warning that this “onslaught of crypto political spending” was piling “venality onto perversion onto corruption” in a Congress already not so popular with voters.
Gemini v JPMorgan heating up
Speaking of popularity, JPMorgan (NASDAQ: JPM) isn’t winning any friends over at the Gemini exchange. On July 25, Gemini co-founder Tyler Winklevoss tweeted that JPM “told us that because of it they were pausing their re-onboarding of @Gemini as a customer after they off-boarded us during Operation ChokePoint 2.0. They want us to stay silent while they quietly try to take away your right to access YOUR banking data for free through third-party fintechs like [Plaid].”
The ‘it’ in Tyler’s tweet refers to comments he tweeted last week slamming JPM for announcing plans to impose fees on third-party data aggregators who help connect fintech companies like Gemini to banking customer data held by JPM.
Last week, fintech/crypto associations sent a letter to President Trump seeking federal assistance in blocking the banking sector’s efforts to prevent implementation of the Consumer Financial Protection Bureau’s (CPFB) open banking rule. The CFPB voluntarily withdraws the rule based on the new leadership’s view that the rule is “arbitrary and capricious” and exceeds the CFPB’s authority.
Tyler’s July 25 tweet namechecked JPMorgan CEO Jamie Dimon, warning him that the crypto sector wouldn’t “stay silent” about the banking sector’s “anti-competitive, rent-seeking behavior and immoral attempt to bankrupt fintech and crypto companies.”
Bank-to-fintech bridges like Plaid have warned that the new fees could amount to hundreds of millions of dollars per year. These costs would almost certainly be passed on to crypto operators, who would in turn likely pass them on to exchange users. With Gemini planning an initial public offering, this isn’t the best time to have their operations look less profitable.
CFTC awaits Quintenz, who awaits committee hearing that never comes
Monday was supposed to see the Senate Agriculture Committee approve the nomination of Brian Quintenz, President Trump’s pick to run the Commodity Futures Trading Commission (CFTC). But the vote was called off at the last minute for reasons that were yet unspecified.
This marks the second time Quintenz has been denied his moment in the spotlight, following a similar cancellation on July 21. That vote was scrapped when one of the committee’s GOP members was unable to return to Washington due to a cancelled flight.The delays in following the steps necessary to get Quintenz’s approval to the Senate floor for a final vote are all the more problematic given the skeleton crew manning the CFTC fort. Usually staffed by a chair and four other commissioners, there are currently only two: Kristin Johnson and acting chair Caroline Pham, both of whom have already signalled their intentions to fly the coop.
Under the Digital Asset Market Structure Bill approved by the House earlier this month (CLARITY Act), the CFTC is responsible for the bulk of crypto oversight. The Securities and Exchange Commission (SEC) will be responsible solely for tokens deemed to be securities and the platforms offering these securities, categories that seem to shrink by the day.
The Bit Short?
Meanwhile, Senate Democrats want to know more about plans to permit home buyers to include digital assets in their mortgage applications.
In late-June, William Pulte, the new director of the Federal Housing Finance Agency (FHFA), tweeted that “after significant studying, and in keeping with President Trump’s vision to make the United States the crypto capital of the world, today I ordered the Great Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for a mortgage.”
Fannie and Freddie are government-sponsored enterprises that buy mortgages from lenders so that said lenders can issue additional loans. The mortgages are then repackaged as mortgage-backed securities that are sold to investors. (You may recall something of this subject from the 2008 global financial crisis, which required the FHFA to take over the sinking enterprises.)
Pulte’s tweet included a letter directing Fannie/Freddie to “prepare a proposal for consideration of cryptocurrency as an asset for reserves in their respective single-family mortgage loan risk assessments, without conversion of said cryptocurrency to U.S. dollars.”
The letter doesn’t specify which tokens might be found acceptable for this role, beyond a stipulation that the tokens must be those “that can be evidenced and stored on a U.S.-regulated centralized exchange subject to all applicable laws.”
On July 25, four Senate Democrats and Bernie Sanders (I-VT) sent Pulte a letter stating their concerns that his crypto plan “could introduce unnecessary risks to consumers and pose serious safety and soundness concerns for the U.S. housing and financial markets.”
For instance, digital assets’ inherent volatility means crypto-holding borrowers face “an increased risk that they may not be able to exit a crypto position and convert to cash at a price that would allow them to buffer against risk of mortgage default.”
The letter also notes that Pulte chairs the boards of both Fannie and Freddie, and he has “stacked the Boards with members who represent FHFA personnel and your industry allies.” As such, the senators see “a serious conflict between your ability to order and approve the Enterprises’ proposals as FHFA Director and to ultimately influence the development of such proposals as Chair of the Enterprises’ boards.” (For the record, the senators aren’t the only ones concerned with Pulte’s motivations.)
Neither a lender nor a borrower be
While Fannie/Freddie accepting tokens as collateral would be breaking new ground, crypto-based loans are anything but new. In April, Galaxy Digital reported that the size of the crypto lending market as of Q4 2024 was $36.5 billion. The top ‘centralized’ lenders are Galaxy, stablecoin issuer Tether, and Ledn, but the bulk of lending still happens on decentralized finance (DeFi) platforms.
On July 26, the Financial Times reported on the growing phenomenon of small-scale lenders like San Francisco-based Divine Research offering short-term, high-interest (20-30%) unbacked loans to individuals who lack collateral or good credit scores. While some compare these loans to those offered by controversial payday lenders, Divine’s founder Diego Estevez called his company’s business model “microfinance on steroids.”
Divine’s loans are under $1,000 and dispensed in USDC, the stablecoin issued by Circle (NASDAQ: CRCL). Divine utilizes the eye-scanning technology of Sam Altman’s World (formerly Worldcoin) to ensure customers who defaulted on previous loans can’t come back for seconds. Divine’s default rate for first-time borrowers is ~40%, which reportedly justifies the high interest rate. Liquidity comes from individuals who make deposits to the platform in search of “good yields.”
Rival lenders such as 3Jane offer similar USDC-based loans to cash-strapped individuals who can show “verifiable proofs” of token ownership, bank assets, or future cash flows. That said, borrowers aren’t required to hand over this collateral to obtain a loan. Defaulted loans are sold to collection agencies.
3Jane is also prepping the launch of a lending platform controlled by AI agents, which would be “programmatically obliged to follow debt covenants,” allowing loans to be offered at “much lower rates.”
Additional competition could be coming from more mainstream entities. The Financial Times reported last week that JPMorgan was “exploring lending against clients’ cryptocurrency holdings,” starting with BTC and ETH, possibly as early as next year.
Goldman Sachs (NASDAQ: GS) issued its first BTC-backed loan in 2022, but that was before the arrival of ‘crypto winter’ following a wave of bankruptcies, frauds, and collapses. Those collapses included digital asset lenders like Digital Currency Group’s Genesis Capital and the Celsius Ponzi scheme. Will the past become prologue, or will the involvement of more ‘mature’ lenders encourage more responsible practices? Never mind…
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