Ripple has recently made headlines for its involvement in politics, particularly its support for Democratic presidential candidate Kamala Harris. This shift in focus raises questions about Ripple’s motives and what it means for the future of the company and its cryptocurrency, XRP.
In the past, Ripple has maintained a neutral stance on U.S. elections and has had a rocky relationship with regulators. However, during the D.C. Fintech Week event, Ripple CEO Brad Garlinghouse praised Harris’s approach to digital assets, calling it “most constructive.” This endorsement comes at a crucial time for Ripple as it navigates its legal battle with the U.S. Securities and Exchange Commission (SEC) and explores the possibility of launching an XRP exchange-traded fund (ETF).
Traditionally, Ripple has not been aligned with the Democratic Party, especially considering the SEC’s $1.3 billion lawsuit against the company during President Biden’s administration. However, co-founder Chris Larsen has made significant donations to Harris’s campaign, totaling $11 million in XRP. This move surprised many in the industry, as some see former President Trump as more supportive of crypto.
Garlinghouse defended Larsen’s decision, stating that Ripple encourages its employees to support candidates they believe are best for the country, regardless of political party. He believes that the 2024 election is crucial for the future of the crypto industry and that both Harris and Trump would improve upon the Biden administration’s approach.
Ripple’s relationship with the SEC has been contentious, with the regulator accusing the company of selling unregistered securities in the form of XRP. While Ripple achieved a partial victory in July 2023, the SEC continues to pursue legal action and recently sought a $2 billion fine. Ripple sees the $125 million penalty it received as a victory, but the SEC’s ongoing appeal creates uncertainty.
Ripple’s recent political moves, including donations to both Harris and Trump, suggest a strategic approach. The approval of an XRP ETF would be a significant milestone for Ripple, as it would validate XRP as a legitimate financial asset and address concerns raised by the SEC lawsuit. Garlinghouse believes that an XRP ETF is “inevitable” due to growing demand from retail and institutional investors. This approval would allow Ripple to meet investor demand in a regulated manner and boost confidence in XRP’s price and liquidity.
Given the SEC’s resistance, Ripple’s donations to both candidates may be a strategic hedge to position the company favorably regardless of the election outcome. Ultimately, Ripple aims to secure approval for its XRP ETF and solidify its position in the cryptocurrency industry.