Ripple’s Political Moves: What’s the Real Agenda Behind Their Donations?
Ripple’s Dual Strategy: Eyeing the Future of XRP
Ripple, the blockchain giant behind XRP, has always been in the spotlight for its various ventures. Recently, Ripple has taken a significant political turn, marked by some intriguing statements from its CEO, Brad Garlinghouse.
During the D.C. Fintech Week event, Garlinghouse praised Democratic presidential candidate Kamala Harris, calling her stance on digital assets “most constructive.” This is a notable shift, considering Ripple’s historical neutrality in U.S. elections and its contentious relationship with U.S. regulators.
Garlinghouse’s comments come as Ripple is considering the possibility of an XRP ETF and navigating the aftermath of its legal battles with the U.S. SEC under a Democratic administration. So, why the shift towards Harris, and what could it mean for Ripple’s future?
Ripple’s Political Pivot
Traditionally, Ripple hasn’t been closely aligned with the Democratic Party, especially after facing a $1.3 billion lawsuit from the SEC under President Biden’s administration in 2020. However, in 2024, we see Ripple CEO and co-founder Chris Larsen making bold statements and donations supporting Democratic presidential candidate Harris.
While maintaining Ripple’s neutral stance on the election, Garlinghouse described Harris as “pro-technology” and praised her connections to Silicon Valley. He suggested that either a Harris or Trump win would benefit the crypto industry, contrasting his criticism of the current Biden administration’s approach.
Adding to the drama, Chris Larsen donated a substantial $10 million in XRP to Harris’ campaign, following an earlier $1 million donation. This move was surprising, especially since Trump had been courting crypto supporters.
“This is completely baffling.”
Nic Carter, a well-known crypto venture capitalist, expressed his confusion on social media. Many in the industry view Trump as a crypto champion, given his vocal support for digital assets. However, Garlinghouse defended Larsen’s decision, emphasizing Ripple’s encouragement for employees to support pro-crypto policies over political party loyalty.
“We need to immediately change course from this administration’s misguided war on crypto.”
Garlinghouse believes the 2024 election is crucial for the crypto industry’s future. Whether Harris or Trump wins, he expects either candidate to improve upon the Biden administration’s approach to digital assets.
Ripple’s Legal Battles and Political Donations
Ripple’s relationship with Democrats, particularly the SEC, has been rocky. In 2020, the SEC accused Ripple of selling unregistered securities in the form of XRP. This lawsuit, filed during Biden’s presidency, has been a persistent issue for Ripple. Although Ripple scored a partial victory in July 2023 when a judge ruled that XRP sales to retail investors didn’t qualify as securities, the SEC didn’t relent.
In August 2024, the SEC sought a $2 billion fine but was awarded a much smaller $125 million penalty. Ripple hailed this as a victory, but the SEC’s ongoing appeal continues to create uncertainty.
A Strategy of Survival?
Ripple’s recent political moves are strategic. In June 2024, Ripple’s Chief Legal Officer, Stuart Alderoty, made headlines with a $300,000 XRP donation to Trump’s presidential campaign. This donation came when Trump had adopted a pro-crypto stance, likely influencing Alderoty’s decision.
Between April and June 2024, Trump’s fundraising efforts brought in over $118 million, with $4 million in cryptocurrencies like Bitcoin, Ethereum, and XRP. High-profile donors such as Tyler and Cameron Winklevoss and BitGo CEO Mike Belshe have also supported Trump, aligning the crypto industry with the former president.
“I just donated $1 million in Bitcoin to @realDonaldTrump and will be voting for him in November.”
Despite Ripple’s apparent split allegiances, the broader crypto industry has heavily backed Trump. Recent data shows that crypto companies have spent 62% more on ads for Republicans than Democrats this year. This spending is concentrated on key House races in states like New York, Nevada, and California.
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 reaching $190 million for this election cycle, the stakes have never been higher.
Ripple Eyes XRP ETF
On one hand, Larsen supports Harris, while on the other, Alderoty donated to Trump’s campaign. Ripple’s recent donations could be a strategic maneuver to hedge its bets.
Bitwise and Canary Capital have already filed for XRP ETFs, which would allow investors to gain exposure to XRP through a stock exchange without holding the actual cryptocurrency. Garlinghouse recently called an XRP ETF “inevitable,” noting the growing demand from both retail and institutional investors.
Spot Bitcoin ETFs have grown to command over $50 billion in assets under management, proving institutional investors’ eagerness to gain exposure to cryptocurrency without direct ownership complexities. Ethereum ETFs, despite initial excitement, have amassed about $7 billion in AUM — much smaller than Bitcoin.
For Ripple, the approval of an XRP ETF would be a significant win. It would validate XRP as a legitimate financial asset and help resolve lingering concerns from the SEC lawsuit. An ETF would allow Ripple to meet investor demand in a regulated, mainstream way, boosting confidence in XRP and potentially driving up its price and liquidity.
With the SEC’s resistance, Ripple’s donations to both Harris and Trump might be a strategic hedge, positioning the company to benefit from either candidate’s favor and finally secure approval for their long-awaited XRP ETFs, regardless of the 2024 election outcome.
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