Bitcoin woos Washington to ensure lawmakers don’t kill industry

Courting Lobbyists

Yet some lobbyists, many of whom want to represent Bitcoin ventures, warn that as the virtual currency’s popularity broadens, such powerful industries with well-established Washington operations as banking and credit-card companies might begin to turn on a perceived threat.

“With the Senate hearings, they may have awoken a sleeping giant who is less enamored with virtual currency than they are,” said Heather Podesta, a lobbyist who is seeking clients in the Bitcoin realm. “As with any new industry they’ll probably have to play some defense as people begin to raise questions.”

Bitcoin, created five years ago by an anonymous programmer or programmers known as Satoshi Nakamoto, exists as strings of computer code. “Miners” unlock new Bitcoins by using ever- faster computers to solve complex mathematical problems. The will only be 21 million Bitcoins created, a ceiling that potentially enhances each one’s value.

Golden Likeness

Its decentralized and limited production appeals to investors and libertarians in the way that gold does, although skeptics see little more than a new financial bubble.

The foundation, which tech entrepreneur Peter Vessenes began in July 2012, says on its website that its mission is to standardize, protect and promote Bitcoin. The organization has members representing the biggest investors and companies in the industry, including Lightspeed Venture Partners, a Menlo Park, California venture capital firm, and Bitcoin Investment Trust, a virtual currency fund run by New York-based SecondMarket Inc.

The foundation employs an executive director, a finance director, general counsel and a Washington-based spokeswoman -- all paid in Bitcoins.

The Washington employee, Jinyoung Lee Englund, was a scheduling aide to Representative Cathy McMorris Rodgers, a Washington State Republican. Englund worked on Republican Mitt Romney’s 2012 presidential campaign, and at the Heritage Foundation, a Washington-based group that promotes reduced government regulation.

Bitcoin Executives

Patrick Murck, the foundation’s general counsel, works out of Seattle and said he is in Washington about one week per month. Murck previously worked at a Washington-based law firm that specializes in telecommunications issues.

Also working the halls of Congress and regulating agencies for Bitcoin are investor representatives. Jeremy Allaire, of Circle Internet Financial, which received the second largest venture capital investment in Bitcoin, testified in November at a Senate Homeland Security Committee hearing.

Perkins Coie, which also employs President Barack Obama’s former White House counsel Bob Bauer, doesn’t lobby but does provide legal services and strategic advice for the foundation and an estimated 90% of the Bitcoin industry, said Lowell Ness, a partner based in Palo Alto, California.

<< Page 2 of 3 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus