Ripple CEO Brad Garlinghouse speaks at the 2022 Milken Institute Global Conference in Beverly Hills, California, USA on May 4, 2022.
Mike Blake | Reuters
Ripple Labs CEO Brad Garlinghouse is skeptical about crypto regulation in the US but is extremely optimistic about the upcoming post-election environment.
“This is the most important election we have ever had, but I also believe that no matter what happens, we will have a more crypto- and innovation-friendly Congress than ever before,” he said in a statement Wednesday with CNBC at DC Fintech Week .
Ripple, an experienced crypto company known, among other things, for its close association with the XRP Token operates a global payments business with banks and financial institutions as its primary customers. About 95% of its business takes place outside the U.S., which Garlinghouse said is partly due to the contentious environment in Washington.
In 2020, the U.S. Securities and Exchange Commission sued Ripple, but last year the company scored a major victory for the industry when a judge ruled that XRP is not a security when sold to retail investors on exchanges.
On Wednesday, Garlinghouse offered some advice to fintech startups during these changing times: “Start outside the United States.”
Nevertheless, he was optimistic about where the industry will develop in the long term.
“Anyone who doesn’t believe that we will definitely end up in a better place is not paying attention… and [if in] We look back 10 years at the many years in which the USA made mistakes. … It will be a speed bump and this industry will continue to thrive.”
An impending “reset”
Ripple has donated at least $45 million to cryptocurrency political action committee Fairshake. Co-founder Chris Larsen recently donated $11 million to Vice President Kamala Harris' campaign. Garlinghouse pointed out that he intentionally wore a purple tie on Wednesday.
“Obviously Trump came out early and very aggressively on cryptocurrency.” [way] and said he was the crypto president,” Garlinghouse said. “Team Harris was more nuanced. “This week they had some of the most constructive things they've ever said publicly.”
“Kamala Harris comes from Silicon Valley, she has been interested in technology in general over the years,” he added. “She has been relatively quiet on the issue, but I think no matter what happens, we will see a fresh start.”
Because of this dichotomy, sentiment in the crypto industry has become increasingly partisan – even though it has previously welcomed growing bipartisan support for crypto issues in Congress. Many pro-crypto voters fear that the Harris campaign would continue what Garlinghouse called the “attack” on crypto.
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“No matter what happens, we will leave behind a failed approach from the Biden administration,” he said. “It was an attack, and it wasn’t just the SEC [Office of the Comptroller of the Currency] is hostile to cryptocurrencies; The Treasury Department is hostile to cryptocurrencies.”
He stressed that banks are no longer willing to work with crypto companies, in what many in the industry are calling “Operation Chokepoint 2.0.” The term refers to an Obama-era project called “Operation Choke Point,” which stopped banks from serving risky but legal businesses like payday lenders and online gambling companies.
“This is a hostile administration and no matter what happens in this next election, we will have a fresh start,” Garlinghouse said. “We can debate the extent of this restart, and there is a lot of disagreement about that. … We’ll see progress, and I’m definitely looking forward to that.”
Although Garlinghouse has not publicly endorsed any of the presidential candidates, he said this week he endorsed John Deaton, a lawyer seeking to unseat Sen. Elizabeth Warren, D-Mass. Warren has been critical of the crypto industry and has sought additional oversight of the space.