Why is Ripple Betting Big on Harris and Shocking Everyone?
Ripple has thrown millions behind Kamala Harris. What’s the real agenda here? Is this about politics, or is Ripple gearing up for something bigger with XRP?
Ripple’s split personality hits
Ripple, the blockchain giant behind XRP, has always been in the spotlight for something or the other. Lately, though, it seems Ripple is stepping up its political game, especially with some eye-catching statements from its CEO, Brad Garlinghouse.
During the D.C. Fintech Week event, Garlinghouse gave a rare nod to Democratic presidential candidate Kamala Harris, praising her approach to digital assets. He even went as far as calling her stance on crypto “most constructive.”
Now, this raises some eyebrows, considering Ripple’s historical neutrality in U.S. elections and its rocky relationship with the U.S. regulators.
But Garlinghouse’s comments come at an interesting time—one where Ripple is eyeing the possibility of an XRP ETF and dealing with the aftershocks of its longstanding legal battle with the U.S. SEC under a Democratic administration.
So, why the shift towards Harris, and what could it mean for Ripple’s future? Let’s take a look at Ripple’s political donations, the company’s hopes for an XRP ETF, and the drama surrounding it all.
Ripple’s political pivot
Traditionally, Ripple hasn’t exactly been best friends with the Democratic Party, especially considering the $1.3 billion lawsuit it faced from the SEC under President Biden’s administration in 2020.
Yet, here we are in 2024, watching Ripple CEO and co-founder Chris Larsen make bold statements and donations supporting Democratic presidential candidate Harris.
Garlinghouse, while still maintaining Ripple’s neutral stance on the election, described Harris as “pro-technology” and praised her connections to Silicon Valley.
He even suggested that either a Harris or Trump win would benefit the crypto industry, a notable contrast to his harsh criticism of the current Biden-led administration’s approach.
But the real drama unfolded when Chris Larsen donated a whopping $10 million in XRP to Harris’ campaign, following an earlier donation of $1 million. This came after Trump had been heavily courting crypto supporters, making Larsen’s move even more surprising.
Nic Carter, a well-known crypto venture capitalist, expressed his confusion on Twitter, calling the donation “completely baffling.” After all, many in the industry see Trump as more of a crypto champion, given his vocal support for digital assets.
But Garlinghouse defended his co-founder’s decision, stating that Ripple encourages its employees to support whoever they believe is best for the country, reiterating that this is more about pro-crypto policies than political party loyalty.
He voiced that the upcoming 2024 election is crucial for the future of the crypto industry. Whether Harris or Trump wins, Garlinghouse believes either candidate would improve upon what he called the Biden administration’s “failed approach” to digital assets.
This has only added to the speculation about Ripple’s motives, as the company’s relationship with the SEC remains contentious.
Ripple’s relationship with Democrats, particularly the SEC, has been far from smooth. In 2020, the SEC hit Ripple with a hefty lawsuit, accusing the company of selling unregistered securities in the form of XRP.
This lawsuit, filed during Biden’s presidency, has been a dark cloud hanging over Ripple for years. Though 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 back down.
In the latest verdict in August 2024, the regulator sought a massive $2 billion fine, only to be 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 have been anything but ordinary. Just months ago, in June 2024, Ripple’s Chief Legal Officer, Stuart Alderoty, made headlines with a hefty $300,000 XRP donation to Trump’s presidential campaign.
Alderoty’s donation came at a time when Trump had shifted towards a pro-crypto stance, a change that likely influenced the Ripple CLO’s decision. After all, many believed that if Trump returned to the White House, he would replace Gensler with a more crypto-friendly SEC chair, potentially benefiting the crypto industry.
In fact, between April and June 2024, Trump’s fundraising efforts brought in over $118 million, with $4 million of that in cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and XRP.
High-profile donors such as Tyler and Cameron Winklevoss and BitGo CEO Mike Belshe have also backed Trump, further cementing the crypto industry’s alignment with the former president.
Despite Ripple’s apparent split allegiances, the broader crypto industry has been heavily backing Trump. Recent data from AdImpact reveals that crypto companies have spent 62% more on ads for Republicans than Democrats this year.
Fairshake, a top-spending PAC, has poured $54.6 million into election ads supporting GOP candidates, compared to $33.7 million for Democrats.
Much of this spending is concentrated on key House races in states like New York, Nevada, and California. For instance, Southern California Republicans David Valadao and Michael Garcia, both in tight races, have received $1.3 million and $1 million, respectively, from crypto-backed PACs.
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. Whether it’s Trump or Harris in the Oval Office come 2025, Ripple seems determined to ensure that it has a seat at the table. But why?
Ripple eyes XRP ETF
On one hand, Larsen has been vocally supporting Harris. On the other hand, Alderoty donated to Trump’s campaign in June 2024. However, Ripple’s recent donations—both to Harris and Trump—could be a strategic maneuver at play.
Bitwise and Canary Capital have already filed for XRP ETFs, which, if greenlit, would allow investors to gain exposure to XRP through a stock exchange without holding the actual cryptocurrency.
Garlinghouse, speaking to Bloomberg recently, even called an XRP ETF “inevitable,” noting that there is growing demand from both retail and institutional investors to access this asset class. If the XRP ETF is approved, it could shift the arena for Ripple and its stakeholders.
For instance, spot Bitcoin ETFs have grown to command over $50 billion in assets under management, proving that institutional investors are eager to gain exposure to cryptocurrency without the complexities of direct ownership.
On the other hand, Ethereum ETFs, despite launching with great anticipation in July 2024, have amassed only about $7 billion in AUM — a much smaller figure compared to Bitcoin.
From Ripple’s perspective, the approval of an XRP ETF would be a huge win. Not only would it validate XRP as a legitimate financial asset, but it would also help resolve the lingering concerns that the SEC lawsuit has raised.
Hence, 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 current 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 — no matter who wins the 2024 election.
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