Change of Tone for Crypto?
The president of US crypto firm Ripple is optimistic that a lobbying push by the crypto industry will yield results in this year’s US elections. Ripple, the second-largest donor to Fairshake, a super PAC, has contributed to a record $92.9 million fundraising haul to support crypto-friendly political candidates.
San Francisco-based Ripple and other super PACs backed by the cryptocurrency sector have raised over $102 million so far, the third-largest of all super PACs engaged in the 2024 election cycle. These independent political action committees can raise and spend unlimited sums to advocate for or against political candidates.
At the Money20/20 financial technology conference in Amsterdam, Ripple president Monica Long highlighted the industry’s frustration with the US lagging in setting clear regulatory rules. She emphasized that the PAC is bipartisan and focuses solely on supporting candidates who back favorable regulations for the crypto industry. Long expressed optimism about the industry's influence, despite challenges from heightened scrutiny and legal battles.
The crypto industry is increasingly trying to influence US lawmakers as it faces heightened scrutiny from regulators and politicians, especially since bankruptcies at major crypto firms in 2022 spooked investors, exposed fraud and misconduct, and left millions of crypto investors out of pocket.
Several leading crypto firms, including Ripple, have faced lawsuits from the US Securities and Exchange Commission (SEC) for alleged securities law violations. A federal judge recently ruled that Ripple’s sale of its token, XRP, to sophisticated buyers amounted to unlawful sales of unregistered securities, though XRP sold on public exchanges did not meet the legal definition of a security.
The SEC seeks fines and penalties totaling $2 billion in its case against Ripple. In response, crypto groups are pushing for lawmakers to pass a bill that would curtail the SEC’s oversight of the industry. According to Public Citizen, approximately half of the crypto industry’s political funds come from direct corporate expenditures, primarily from Coinbase and Ripple, with the remainder contributed by venture capitalists.
Despite the significant lobbying efforts, the crypto industry faces challenges in winning public support. A survey by Digital Currency Group found that just 14% of voters in swing states own cryptocurrency, with 69% of them feeling negative towards crypto.
“Most voters are dissatisfied with the current financial system, and only a minority think crypto is the future of transacting, or a new way to prosperity,” the report noted.
US President Joe Biden recently vetoed a Republican-led resolution that he said would "inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues” related to crypto assets. SEC Chairman Gary Gensler has previously called the crypto industry a “Wild West” riddled with fraud and investor risk.
Ripple’s Long described the SEC’s recent actions as a “war path” against the crypto industry, expressing hope for a “change in tone” in regulatory approaches. As the crypto industry continues to evolve and push for favorable regulations, the upcoming US elections could be pivotal in shaping its future.
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