Why Has Ripple Become a Topic of Interest
Ripple, the prominent blockchain company known for its cryptocurrency XRP, has recently made waves in the political arena. The company’s CEO, Brad Garlinghouse, publicly expressed support for Democratic presidential candidate Kamala Harris, praising her stance on digital assets. This is a significant shift for Ripple, as it has historically remained neutral in U.S. elections and has had a rocky relationship with regulators.
The timing of Garlinghouse’s comments is noteworthy, as Ripple is currently considering the possibility of launching an XRP exchange-traded fund (ETF) and is still dealing with the legal aftermath of its battle with the U.S. Securities and Exchange Commission (SEC) under the Biden administration.
So, why the sudden support for Harris, and what does it mean for Ripple’s future? Let’s delve into Ripple’s political donations, their aspirations for an XRP ETF, and the surrounding controversy.
Traditionally, Ripple has not been aligned with the Democratic Party, particularly due to the $1.3 billion lawsuit it faced from the SEC during President Biden’s administration in 2020. However, in 2024, Ripple’s CEO Chris Larsen made substantial donations to support Harris, despite former President Trump’s efforts to court the crypto community. This move puzzled many industry experts, as Trump had been seen as more supportive of cryptocurrencies.
Garlinghouse defended Larsen’s decision, stating that Ripple encourages its employees to support candidates they believe are best for the country, emphasizing that this is about pro-crypto policies rather than political loyalty. He believes that the outcome of the 2024 election is critical for the future of the crypto industry, and both Harris and Trump would be an improvement over the Biden administration’s approach.
This shift in Ripple’s political alignment has raised speculation about the company’s motives, especially considering its ongoing legal battle with the SEC. The relationship between Ripple and the Democrats, particularly the SEC, has been fraught with tension. The SEC filed a lawsuit against Ripple in 2020, accusing the company of selling unregistered securities in the form of XRP. While Ripple achieved a partial victory in July 2023 when a judge ruled that XRP sales to retail investors did not qualify as securities, the SEC has not relented. In August 2024, the regulator sought a $2 billion fine, but was only awarded a $125 million penalty. The SEC’s appeal of the verdict continues to create uncertainty for Ripple.
Ripple’s recent political moves have been far from ordinary. Just a few months ago, Ripple’s Chief Legal Officer, Stuart Alderoty, made headlines by donating $300,000 worth of XRP to Trump’s presidential campaign. This came at a time when Trump had shifted toward a more favorable stance on cryptocurrencies. Many believed that if Trump were reelected, he would replace SEC Chair Gary Gensler with someone more crypto-friendly, which could benefit the industry.
Despite Ripple’s seemingly conflicting allegiances, the broader crypto industry has heavily supported Trump. Recent data shows that crypto companies have spent 62% more on advertisements for Republicans than Democrats this year. PACs like Fairshake have poured millions of dollars into ads supporting GOP candidates, indicating a clear alignment between the crypto industry and the former president.
Ripple’s dual strategy reflects the uncertainty surrounding the 2024 U.S. presidential election and its potential impact on the crypto industry. With crypto groups donating a record-breaking $190 million for this election cycle, the stakes have never been higher. Regardless of whether Trump or Harris assumes the presidency in 2025, Ripple wants to ensure that it has a seat at the table. But the question remains, what is Ripple’s ultimate goal?
In addition to its political maneuvering, Ripple has its sights set on launching an XRP ETF. Bitwise and Canary Capital have already filed for XRP ETFs, which, if approved, would allow investors to gain exposure to XRP through a stock exchange without actually owning the cryptocurrency. Garlinghouse has stated in a recent interview that an XRP ETF is “inevitable,” as there is increasing demand from both retail and institutional investors to access this asset class. The approval of an XRP ETF would not only legitimize XRP as a financial asset but also address the concerns raised by the SEC lawsuit.
For Ripple, an approved XRP ETF would be a significant victory. It would meet investor demand in a regulated and mainstream manner, boosting confidence in XRP and potentially driving up its price and liquidity. Given the SEC’s resistance thus far, Ripple’s donations to both Harris and Trump could be a strategic move to position the company favorably and secure approval for its long-awaited XRP ETF, regardless of the election outcome.
In conclusion, Ripple’s recent foray into politics and its donations to both Harris and Trump have raised eyebrows in the crypto industry. The company’s shift in political alignment and its pursuit of an XRP ETF indicate a strategic maneuver to navigate the uncertain political landscape and secure its position in the crypto industry. The outcome of the 2024 U.S. presidential election will undoubtedly have a significant impact on Ripple’s future and the broader crypto industry.
