Crypto industry’s lobbying drive will pay off in US elections, Ripple president says By Reuters

Written by Elizabeth Howcroft and Hannah Lange

AMSTERDAM/NEW YORK (Reuters) – The head of a U.S. cryptocurrency company said she was “optimistic” that lobbying by the cryptocurrency industry will yield results in this year’s U.S. elections, after her company helped the industry lead a record fundraising operation to support crypto-friendly political candidates. San Francisco-based Ripple is the second-largest donor to Fairshake, a so-called Super PAC, which raised $92.9 million in an attempt to sway November congressional elections in favor of the cryptocurrency industry, according to research group OpenSecrets. Which tracks influence in politics. Crypto-backed super PACs have raised more than $102 million so far this cycle, the third-largest super PACs participating in the 2024 election, according to data from Public Citizen.

Independent political action committees known as Super PACs may raise unlimited sums of money from corporations, unions, associations, and individuals, and then spend unlimited sums to publicly advocate for or against political candidates.

Speaking at the Money20/20 fintech conference in Amsterdam on Tuesday, Ripple CEO Monica Leung told Reuters that the political action committee is bipartisan and has one focus: supporting candidates who support regulations desired by the cryptocurrency industry.

“I think as an industry, and especially for us U.S.-based companies, we're frustrated with how far behind the U.S. is in setting the rules,” she said. “This whole dynamic of rulemaking through enforcement…is really unproductive and is not going to get us anywhere.”

Asked if she was optimistic that the voice of the US cryptocurrency industry would be heard, Long said: “I'm optimistic, yes. I'm optimistic.”

The cryptocurrency industry is increasingly trying to influence US lawmakers as it faces increasing scrutiny from regulators and politicians, especially as bankruptcies of major cryptocurrency companies in 2022 have spooked investors, exposed fraud and misconduct and left millions of cryptocurrency investors out of pocket.

Several leading cryptocurrency companies have been sued by the US Securities Exchange Commission for alleged securities law violations, including Ripple. A federal judge ruled in July that Ripple's sale of its token, XRP, to sophisticated buyers amounted to illegal sales of unregistered securities, but also ruled that XRP sold on public exchanges does not meet the legal definition of a security.

Ripple said the SEC is seeking to impose fines and penalties totaling $2 billion in its case against the company.

Cryptocurrency groups are pressuring lawmakers to pass a bill that would limit the SEC's oversight of the industry. A report by Public Citizen said that nearly half of the cryptocurrency industry's political war chest comes from direct corporate expenditures, primarily from cryptocurrency exchanges Coinbase (NASDAQ:) and Ripple, with the rest contributed by venture capitalists. However, industry-specific data suggest that lobbyists may have difficulties winning support. A survey by US cryptocurrency firm Digitalency Group, published in May, found that only 14% of voters in US states whose results could swing to either Democrats or Republicans, and 69% of them felt negative about cryptocurrencies, compared to 31%. They feel positive. “While most voters are dissatisfied with the current financial system, only a minority believe that cryptocurrencies are the future of transactions, or a new way to thrive,” the report said. US President Joe Biden, a Democrat, last week vetoed what he described as a Republican-led resolution that would “improperly restrict the SEC's ability to establish appropriate guardrails and address future issues” related to cryptocurrency assets. SEC Chairman Gary Gensler has previously described the cryptocurrency industry as a “Wild West” rife with fraud and investor risk.

Ripple's Long said the SEC seemed to be on a “warpath” with the cryptocurrency industry in recent years, and that everyone was hoping for a “change in tone.”