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Crypto industry's lobbying drive will pay off in US elections, Ripple president says

Published 06/04/2024, 06:03 PM
Updated 06/05/2024, 02:00 AM
© Reuters. FILE PHOTO: Representation of the Ripple payments network is seen in this illustration taken November 29, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

By Elizabeth Howcroft and Hannah Lang

AMSTERDAM/NEW YORK (Reuters) -The president of U.S. crypto firm Ripple is "optimistic" that a lobbying push by the crypto industry will yield results in this year's U.S. elections, after her company helped the industry lead a record fundraising haul to back political candidates who are crypto-friendly. San Francisco-based Ripple is the second-largest donor to Fairshake, a so-called super PAC, which has raised $92.9 million in a bid to influence the congressional elections in November in favor of the crypto industry, according to OpenSecrets, a research group that tracks influence in politics. Super PACs backed by the cryptocurrency sector have raised more than $102 million so far this cycle, the third-most of all super PACs engaged 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, then spend unlimited sums to overtly advocate for or against political candidates.

Speaking at the Money20/20 fintech conference in Amsterdam on Tuesday, Ripple President Monica Long told Reuters that the PAC is bipartisan and has a single focus: supporting candidates who back the regulations desired by the crypto industry.

"I think as an industry, especially for us companies based in the U.S., we’re frustrated with how far the U.S. is lagging on setting rules," she said. "This whole dynamic of setting rules through enforcement ... is really unproductive and not getting us anywhere."

Asked if she was optimistic that the U.S. crypto industry's voice will be heard, Long said, "I’m optimistic, yes. I’m hopeful.”

The crypto industry is increasingly trying to influence U.S. 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 have been sued by the U.S. securities regulator for alleged securities law violations, including Ripple. A federal judge in July ruled that Ripple's sale of its token, XRP, to sophisticated buyers amounted to unlawful sales of unregistered securities, but also ruled that XRP sold on public exchanges did not meet the legal definition of a security.

The Securities and Exchange Commission is seeking fines and penalties totaling $2 billion in its case against the firm, Ripple has said.

© Reuters. FILE PHOTO: Representation of the Ripple payments network is seen in this illustration taken November 29, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

Crypto groups are pushing for lawmakers to pass a bill that would curtail the SEC's oversight of the industry. A report from Public Citizen said that roughly half of the crypto industry's political war chest comes from direct corporate expenditures, primarily from crypto exchange Coinbase (NASDAQ:COIN) and Ripple, with the remainder contributed by venture capitalists. The industry's own data, however, suggests lobbyists could face difficulties in winning support. A survey by U.S. crypto company Digital Currency Group published in May found that just 14% of voters in U.S. states whose results could swing either Democratic or Republican own cryptocurrency and 69% of them feel negative toward crypto, compared with 31% who feel positive. "While most voters are dissatisfied with the current financial system, only a minority think crypto is the future of transacting, or a new way to prosperity," the report said. U.S. President Joe Biden, a Democrat, last week vetoed what he described as a Republican-led resolution that would "inappropriately constrain the SEC's ability to set forth appropriate guardrails and address future issues" relating to crypto assets. SEC Chair Gary Gensler has previously called the crypto industry a "Wild West," riddled with fraud and investor risk.

Ripple's Long said the SEC appeared to have been on a "war path" with the crypto industry in recent years, and that everyone was hoping for a "change in tone."

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