Ripple CEO Brad Garlinghouse knows what it’s like to win. He’s enjoyed a series of high-profile courtroom victories over the Securities and Exchange Commission. Now, the cryptocurrency entrepreneur wants to take his winning record to the next arena:
Politics.
Because of the legal battle he fought for nearly three years and won, and the political muscle he now has acquired, industry observers say Garlinghouse has emerged as a key influencer set to play a decisive role in crypto’s future.
Ripple recently announced it’s making a $25 million donation to Fairshake, a crypto-focused Super Political Action Committee, its second such payment in the past year, making Garlinghouse’s company the super PAC’s biggest donor. And it’s not a short-term move, either.
“The crypto industry intends to remain heavily invested in this effort until we see meaningful change,” he pledged.
Garlinghouse is best known in financial circles for, as he told Coindesk.com last year, “(driving) a freight train through Gary Gensler’s core arguments.” Gensler, the SEC’s anti-crypto chairman, is part of a broad effort in Washington to regulate crypto in ways that Garlinghouse and others in the industry say are not supported by securities law. And so they’re fighting back.
“They see regulators as a chief impediment to their business and wide adoption of their token,” Consumer Choice Center Deputy Director Yaël Ossowski said. And perhaps with good reason.
Two days after Ripple’s most recent donation to Fairshake, President Biden vetoed a bill he complained would “inappropriately constrain” the SEC’s regulation of crypto.
There’s also the legislative specter of Sen. Elizabeth Warren, D-Mass. Warren co-sponsored the Digital Asset Anti-Money Laundering Act, which would force any American with $10,000 in digital assets or one or more digital assets overseas to file a report with the federal government.
According to J.W. Verret, an associate professor at George Mason University’s Antonin Scalia Law School, Warren’s bill “poses a real threat to the crypto community and risks playing right into the hands of big banks.”
But if the regulators’ goal is to end crypto’s role in the economy, Verret says that “crypto policy is here to stay.” And Garlinghouse’s efforts may already be showing results on Capitol Hill.
Fairshake played a central role in the SEC’s two recent defeats in Congress. Senate Majority Leader Chuck Schumer and former speaker Nancy Pelosi voted to strip the SEC of its self-appointed authority over crypto.
Verret said that Bitcoin’s popularity as a financial asset will keep crypto policy at the forefront.
Despite volatility in the crypto markets, Bitcoin’s price has steadily hovered around $71,000 since March. This stability is enough for Warren Buffett, who famously called Bitcoin “rat poison,” to invest in a Brazilian bank that specializes in Bitcoin and crypto.
President Biden appears to be coming around, too.
According to crypto news site The Block, Biden’s campaign is reaching out to cryptocurrency industry insiders, “as Biden’s camp increasingly recognizes the impact crypto-related issues could have on a presidential race that is likely to be close.”
In fact, Fairshake supports candidates on both sides of the political aisle, a traditional strategy for advancing an industry’s cause, rather than picking partisan fights.
Campaign finance data from the Federal Election Commission found that Garlinghouse sent $36,5000 each to the campaign arms of Democrats and Republicans in the Senate and House.
Garlinghouse donated $6,600 to crypto attorney John Deaton’s Massachusetts Senate campaign against Warren. He also gave the same amount to Jon Tester, Montana’s crypto-skeptic U.S. senator. He gave none to Tester’s Republican opponent, Tim Sheehy, who’s made crypto a key issue in the election.
At the same time, former president Donald Trump has shown a new enthusiasm for crypto. In 2019, he declared himself “not a fan,” but last month his campaign announced it would begin accepting cryptocurrency donations.
“MAGA supporters, now with a new cryptocurrency option, will build a crypto army moving the campaign to victory on November 5th!” according to the campaign announcement.
Garlinghouse hasn’t endorsed a presidential candidate, but he told Politico he thinks the Democratic Party’s anti-crypto, pro-regulation politics could hurt Biden in a close election.
“This has become a real issue for the Democrats, and particularly for Biden. I think they have grossly miscalculated how they have engaged on this topic,” he said.
