Brad Garlinghouse, CEO of Ripple, speaks at the Milken Institute Global Conference 2022 in Beverly Hills, California, USA, May 4, 2022.
Mike Blake Reuters
Ripple Labs CEO Brad Garlinghouse has been skeptical about crypto regulation in the US, but he feels very optimistic about the post-election environment.
“This is the most important election we’ve ever had, but I also believe that no matter what happens, we’re going to have a Congress that’s more pro-crypto, more pro-innovation than we’ve ever had,” he said in a Wednesday conversation with CNBC in DC. Fintech Week.
Ripple, a veteran company in crypto known for a large part of its relationship with XRP token, operates a global payment business with banks and financial institutions as its main customers. About 95% of its business is done outside the US, which Garlinghouse says is partly a reflection of the contentious environment in Washington.
In 2020, the US Securities and Exchange Commission sued Ripple, but last year the company scored a major victory for the industry when a judge determined that XRP was not a security when it was sold to retail investors on the exchange.
On Wednesday, Garlinghouse offered advice to fintech startups in these changing times: “Incorporate outside the United States.”
However, he is confident about the direction of the industry in the long term.
“Anyone who doesn’t believe that no matter what, we’re going to be in a better place, they’re not paying attention. … It’s going to be speed, and this industry is going to continue to grow.”
‘Reset’ is approaching
Ripple has donated at least $45 million to the pro-crypto political action committee Fairshake. Co-founder Chris Larsen recently donated $11 million to Kamala Harris’ Vice Presidential campaign. Garlinghouse pointed out that he purposely wore a purple tie on Wednesday.
“Obviously, Trump came out early and was very aggressive in his pro crypto (way) and said he’s a crypto president,” Garlinghouse said. “Tim Harris is more nuanced. This week, they have some of the most constructive things they have said publicly.”
“Kamala Harris is from Silicon Valley, she’s generally been pro tech for years,” he said. “He’s been relatively quiet on the topic, but I think no matter what happens, we’ll see a reset.”
Because of this contrast, the sentiment in the crypto industry has become increasingly partisan – even before providing bipartisan support for crypto issues in Congress. Many pro-crypto voters fear that the Harris campaign will continue its “attack” on crypto, as Garlinghouse calls it.
“No matter what happens, we will abandon the failed approach of the Biden administration,” he said. “This is an attack, and not just the SEC. (Office of the Comptroller of the Currency) is hostile to crypto; the Treasury is hostile to crypto.
He highlighted banks becoming reluctant to work with crypto businesses in what many in the industry are calling “Operation Chokepoint 2.0.” The term refers to an Obama-era project known as “Operation Choke Point,” which advised banks not to serve risky but legal businesses, such as payday lenders and online gambling businesses.
“This is a hostile administration, and no matter what happens in the next election, we’re going to reset,” Garlinghouse said. “We can debate the magnitude of the reset, and there’s a lot of disagreement on that. … We’ll see progress, and I certainly look forward to it.”
Although Garlinghouse has yet to publicly endorse a presidential candidate, he said this week he endorsed John Deaton, the lawyer seeking to unseat Sen. Elizabeth Warren, D-Mass. Warren has been critical of the crypto industry, seeking additional oversight of the board.