Ripple, the prominent blockchain company known for its cryptocurrency XRP, has recently made headlines for its involvement in the political sphere. CEO Brad Garlinghouse’s praise for Democratic presidential candidate Kamala Harris has raised eyebrows, considering Ripple’s historical neutrality in U.S. elections and its strained relationship with U.S. regulators, particularly the Securities and Exchange Commission (SEC). However, this shift towards Harris comes at a crucial time for Ripple as it explores the possibility of launching an XRP exchange-traded fund (ETF) and continues to navigate its legal battle with the SEC.
Traditionally, Ripple has not been aligned with the Democratic Party, as evidenced by the $1.3 billion lawsuit it faced from the SEC during President Biden’s administration in 2020. Yet, in 2024, Ripple CEO Chris Larsen has made significant donations in support of Harris, despite former President Trump’s efforts to court crypto supporters. This move has left many in the industry puzzled, as Trump has been viewed as more favorable towards cryptocurrencies. Garlinghouse defends 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 loyalties.
The upcoming 2024 election holds significant importance for the future of the crypto industry, according to Garlinghouse. He believes that both Harris and Trump would improve upon what he considers the Biden administration’s inadequate approach to digital assets. This has led to speculation about Ripple’s motives, especially given its contentious relationship with the SEC. In 2020, the SEC filed a lawsuit against Ripple, accusing the company of selling unregistered securities in the form of XRP. Despite a partial victory for Ripple in July 2023, the SEC has continued its legal pursuit, seeking a $2 billion fine. While the recent verdict resulted in a smaller penalty, the SEC’s ongoing appeal creates uncertainty for Ripple.
Ripple’s recent political moves have been anything but ordinary. Just months ago, Ripple’s Chief Legal Officer, Stuart Alderoty, made headlines with a substantial XRP donation to Trump’s presidential campaign. This donation aligns with Trump’s shift towards a pro-crypto stance. The broader crypto industry has shown support for Trump, with high-profile donors and increased ad spending for Republican candidates. However, Ripple’s dual strategy reflects the uncertainty surrounding the 2024 U.S. presidential election and its potential impact on the crypto industry.
Amidst these political maneuvers, 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 directly holding the cryptocurrency. Garlinghouse believes that an XRP ETF is inevitable and sees growing demand from both retail and institutional investors. The approval of an XRP ETF would not only validate XRP as a legitimate financial asset but also address concerns raised by the SEC lawsuit. It would enable Ripple to meet investor demand in a regulated manner, boosting confidence in XRP and potentially driving up its price and liquidity.
Given the SEC’s resistance, Ripple’s donations to both Harris and Trump may serve as a strategic hedge, positioning the company to benefit from either candidate’s favor and ultimately secure approval for their long-awaited XRP ETF, regardless of the 2024 election outcome.