The Bitcoin start-up Coinbase is bolstering its team as it seeks to deepen its engagement with regulators.
The company, one of the most popular digital wallet providers, has hired John Collins, a former adviser to the Senate Homeland Security and Government Affairs Committee, as its head of government affairs. Mr. Collins, who focused on digital currency, will work with lawmakers and public officials on policy decisions related to virtual money.
“Bitcoin is an extremely powerful technology,” said Fred Ehrsam, a co-founder of Coinbase. “As the leader in the space, our main goal is to educate people who are going to form the regulations around it in its formative years so its potential remains.”
Coinbase’s moves comes as Bitcoin start-ups have been uncertain of what potential regulations will be coming. In July, for example, New York became the first state to issue proposed rules for digital currency companies. The public comment period on the BitLicense regulations is set to end next week. Bitcoin has also attracted the attention of other prominent regulatory agencies, including the Securities and Exchange Commission and the Consumer Financial Protection Bureau.
Bitcoin companies are hiring lobbyists, visiting lawmakers on Capitol Hill and writing to agencies about how they should write rules that will determine the future of the fast-growing virtual currency.
It's all part of a push to shape how Washington ultimately regulates the independent, digital money that is growing in popularity.
"The most important thing we're doing is explaining how Bitcoin works," said Jim Harper, a lobbyist who was hired recently as counsel for the Bitcoin Foundation, an organization that represents Bitcoin companies and investors. Harper, who has lobbied for PayPal and VeriSign, is paid in bitcoin.
The timing is ripe.
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Rival political factions facing each other on the streets of Ukraine have also enlisted heavyweight lobbyists in Washington, some with connections at the highest levels of U.S. government, to promote their causes to American policymakers, media and members of Congress.
Among the high-profile lobbyists registered to represent organizations backing Ukrainian President Viktor Yanukovich's government are prominent Democratic lobbyist Anthony Podesta and former Republican congressional leaders Vin Weber and Billy Tauzin.
Meanwhile, Yanukovich's most prominent political rival, Yulia Tymoshenko, the former prime minister who is serving a seven-year prison term for alleged abuse of power, is represented in Washington by former Democratic Congressman Jim Slattery, a partner in the law firm Wiley Rein LLP.
The sums of money involved are substantial. Over the last two years, the European Centre for a Modern Ukraine, a Brussels-based organization sympathetic to Yanukovich and his political party, has paid $560,000 to Weber's firm, Mercury, and another $900,000 to Podesta Group Inc, for a total outlay of $1.46 million, according to a U.S. Senate database.
The database shows total payments over the same two years of $810,000 to Wiley Rein by Oleksandr Tymoshenko, a Ukrainian businessman and husband of Yulia.
"A lot of people are making a lot of money off Ukraine's political competition," said Bruce Jackson, president of the Project on Transitional Democracies, which advocates Western-oriented reforms in Eastern Europe.
"The Yulia-Yanukovich competition has definitely spilled out of the country. Both sides are heavily invested in representation in Washington," Jackson said. He said he and his group do not lobby.
