Why Ripple is Making Headlines
Ripple has recently made headlines for its political involvement and donations to Democratic presidential candidate Kamala Harris. This shift in strategy has raised questions about Ripple’s motives and what it could mean for the future of the company and its cryptocurrency, XRP.
In the past, Ripple has not been closely aligned with the Democratic Party, particularly due to its legal battle with the U.S. Securities and Exchange Commission (SEC) under President Biden’s administration. However, Ripple CEO Brad Garlinghouse has praised Harris for her pro-technology stance and connections to Silicon Valley, suggesting that either a Harris or Trump win would benefit the crypto industry.
The most surprising move came from Ripple co-founder Chris Larsen, who donated a substantial amount of XRP to Harris’ campaign. This decision puzzled many in the industry, as some saw Trump as more supportive of cryptocurrencies. Garlinghouse defended Larsen’s donation, stating that Ripple encourages its employees to support whoever they believe is best for the country, emphasizing that this is about pro-crypto policies rather than political party loyalty.
Ripple’s relationship with the SEC has been contentious, with the regulator filing a lawsuit against the company in 2020, accusing it of selling unregistered securities in the form of XRP. While Ripple scored a partial victory in July 2023, the SEC continues to appeal the decision, creating uncertainty for the company.
Ripple’s recent political moves, including Stuart Alderoty’s XRP donation to Trump’s campaign, have been unconventional. Many in the crypto industry have backed Trump, believing that his return to the White House would lead to a more crypto-friendly SEC chair. However, the broader crypto industry has spent more on ads for Republicans than Democrats, indicating split allegiances.
Ripple’s dual strategy reflects the uncertainty surrounding the 2024 U.S. presidential election and its potential impact on the crypto industry. With political donations from crypto groups reaching $190 million for this election cycle, Ripple wants to ensure it has a seat at the table regardless of the election outcome.
One possible motive behind Ripple’s donations to both Harris and Trump is its interest in securing approval for an XRP exchange-traded fund (ETF). Bitwise and Canary Capital have already filed for XRP ETFs, and Ripple’s CEO believes it is inevitable. If approved, an XRP ETF would validate XRP as a legitimate financial asset and address concerns raised by the SEC lawsuit. It would also allow Ripple to meet investor demand in a regulated way, potentially driving up XRP’s price and liquidity.
In conclusion, Ripple’s recent political involvement and donations to both Harris and Trump indicate a strategic maneuver to position the company for success in the crypto industry, regardless of the election outcome. The approval of an XRP ETF would be a significant win for Ripple, and its donations may serve as a hedge to increase the chances of securing regulatory approval.
