Ripple, the blockchain company known for its cryptocurrency XRP, is making waves in the political arena. CEO Brad Garlinghouse recently praised Democratic presidential candidate Kamala Harris for her approach to digital assets, a surprising move considering Ripple’s historical neutrality in U.S. elections and its rocky relationship with regulators. This shift towards Harris comes at a time when Ripple is eyeing the possibility of an XRP ETF and dealing with the aftermath of its legal battle with the U.S. SEC under a Democratic administration.
The company’s pivot towards the Democratic Party is unexpected, given the $1.3 billion lawsuit it faced from the SEC under President Biden’s administration in 2020. However, Ripple CEO Chris Larsen has made bold statements and donations in support of Harris, even donating a whopping $10 million in XRP to her campaign. This move puzzled many in the industry, as some see former President Trump as more of a crypto champion. 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 party loyalty.
Ripple’s relationship with the SEC has been contentious, with the company facing a lawsuit accusing it of selling unregistered securities in the form of XRP. Although Ripple scored a partial victory in July 2023, the SEC’s ongoing appeal creates uncertainty. In August 2024, the regulator sought a $2 billion fine but was awarded a much smaller $125 million penalty. Ripple hailed this as a victory, but the legal battle continues.
Ripple’s recent political moves have been anything but ordinary. Ripple’s Chief Legal Officer, Stuart Alderoty, made headlines with a $300,000 XRP donation to Trump’s presidential campaign in June 2024. This move coincided with Trump’s shift towards a pro-crypto stance, which likely influenced Alderoty’s decision. Despite Ripple’s apparent split allegiances, the broader crypto industry has heavily backed Trump, with crypto companies spending more on ads for Republicans than Democrats.
Ripple’s dual strategy reflects the uncertainty surrounding the 2024 U.S. presidential election and its impact on the crypto industry. With political donations from crypto groups totaling $190 million for this election cycle, the stakes are high. Whether it’s Trump or Harris in the Oval Office in 2025, Ripple wants to ensure it has a seat at the table.
One possible strategic maneuver behind Ripple’s donations to both Harris and Trump is the pursuit of 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. Garlinghouse believes an XRP ETF is “inevitable” and notes growing demand from retail and institutional investors. Approval of 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 manner, boosting confidence in XRP and potentially increasing its price and liquidity.
In conclusion, Ripple’s recent political moves and donations to both Harris and Trump are strategic maneuvers aimed at securing approval for their long-awaited XRP ETFs. Despite the company’s rocky relationship with the SEC, Ripple is positioning itself to benefit from either candidate’s favor and finally achieve its ETF goals, regardless of who wins the 2024 election.