Ripple CEO Brad Garlinghouse recently addressed the global expansion of the company and the regulatory hurdles faced in the U.S., while Ripple CTO David Schwartz provided critical insights on the security of storing digital assets on centralized exchanges like Coinbase. Additionally, Ripple's significant financial backing for political candidates supportive of crypto signals the industry's growing influence in the political arena.
Ripple Donates $1 Million to Support John Deaton's Campaign Against Elizabeth Warren
Ripple has contributed $1 million to the Commonwealth Unity Fund, a super political action committee (PAC) supporting John Deaton's campaign in the upcoming Massachusetts Republican senatorial primary. Deaton, a lawyer known for his advocacy of Ripple Labs and the broader crypto community, is challenging incumbent Democratic U.S. Senator Elizabeth Warren, a prominent opponent of cryptocurrency.
Deaton, a prominent lawyer in the crypto community, is best known for his legal defense of Ripple Labs. His law practice primarily focuses on victims of mesothelioma and asbestos-related diseases, and he owns the website CryptoLaw. Deaton gained notoriety within the crypto sphere by leading the XRP Army, a group of tokenholders who volunteered to act as third-party defendants in the Securities and Exchange Commission’s (SEC) lawsuit against Ripple. He has also submitted numerous amicus curiae letters in high-profile SEC cases involving crypto firms.
The Commonwealth Unity Fund, established by lawyer James Murphy, aims to bolster Deaton's senatorial campaign. According to the U.S. Federal Election Committee, the PAC has received $1 million from Ripple Labs and $50,000 from Murphy himself. Nonprofit political money tracker Open Secrets reports that the PAC has already spent $30,000 opposing Senator Warren.
Despite Deaton's deep ties to the crypto community, he did not explicitly mention cryptocurrency in his campaign launch. His campaign website only indirectly references crypto through press coverage.
Campaign Finances and Support
Deaton's campaign has raised a total of $1.7 million, with significant contributions from key figures in the crypto world. These contributors include Gemini co-founders Cameron and Tyler Winklevoss, Ripple co-founder Chris Larsen, SkyBridge Capital founder Anthony Scaramucci, Ripple CEO Brad Garlinghouse, Ripple attorney Stuart Alderoty, Kraken co-founder Jesse Powell, Cardano founder Charles Hoskinson, and Coinbase. In contrast, Senator Warren has amassed a campaign fund of $18 million.
While Deaton enjoys substantial support from many in the crypto community, it is not universal. The pro-crypto super PAC Fairshake and the Sentinel Action Fund have not backed Deaton. Additionally, Coinbase-backed Stand with Crypto has not endorsed his campaign either.
Meanwhile, pro-crypto Senator Cynthia Lummis has thrown her support behind Ian Cain, a fellow contender for the Republican nomination and co-founder of Qubic Labs, a blockchain technology accelerator. Another candidate, engineer Robert Antonellis, is also in the running for the nomination.
Polling indicates that Senator Warren holds overwhelming support in the race for the Senate seat. Her strong anti-crypto stance has made her a formidable opponent for Deaton and other pro-crypto candidates. The Commonwealth Unity Fund's efforts, along with Ripple's significant financial backing, highlight the growing intersection of cryptocurrency and politics as the industry seeks to influence regulatory and legislative outcomes.
As the Massachusetts Republican senatorial primary approaches on Nov. 5, the financial contributions and endorsements from the crypto community will play a crucial role in shaping Deaton's campaign against Senator Warren.
Ripple's $1 million donation shines the spotlight on the high stakes involved as the crypto industry continues to navigate the complex political landscape in the United States. The outcome of this primary could have far-reaching implications for the future of cryptocurrency regulation and the broader financial industry.
Ripple CEO Brad Garlinghouse Criticizes U.S. Regulatory Climate, Highlights Global Growth
At the recent Brainstorm Tech summit hosted by Fortune, Ripple CEO Brad Garlinghouse delivered a pointed critique of the U.S. regulatory environment for cryptocurrency, revealing that 75% of the company's hiring over the past two years has occurred outside the United States. "That's a sad reality," Garlinghouse remarked, signaling his disappointment that high-paying jobs are being created internationally rather than domestically. Despite this, he affirmed that Ripple continues to grow within the U.S.
Garlinghouse highlighted that 95% of Ripple's clients are based outside the U.S., emphasizing the company's focus on customer centricity. He acknowledged the significant employee turnover Ripple experienced following its lawsuit with the SEC in December 2020. Despite this challenge, Ripple has recorded substantial growth by expanding its operations globally. "The products we are selling, the solutions we are enabling are very global," Garlinghouse explained, pointing to the company's resilience and adaptability in navigating international markets.
A recurring theme in Garlinghouse's address was the lack of regulatory clarity in the U.S., which he argued has driven Ripple to seek more favorable environments abroad. "You go to where there is clarity," he stated, citing Japan, Singapore, and the UK as examples of cryptocurrency-friendly nations. These countries have provided the regulatory certainty that allows companies like Ripple to innovate and thrive. In contrast, Garlinghouse characterized the current SEC leadership as out of touch, suggesting they will be seen as "Luddites" in the future for their restrictive stance on cryptocurrency.
The Partisan Divide on Cryptocurrency in the U.S.
Garlinghouse also touched on the politicization of cryptocurrency in the U.S., expressing frustration that it has become a partisan issue. He specifically criticized Senator Warren.
"Essentially only in the U.S. is this even an issue...Elsewhere, folks from the public and private sectors start out by talking about how profound these technologies are and how they can improve existing systems. Let's strive for that (as we have seen in many countries) instead of partisan BS," Garlinghouse posted on X.
Despite the regulatory hurdles in its home country, Ripple remains committed to innovation and growth. The company's strategy of expanding internationally has not only mitigated the impact of U.S. regulatory challenges but also positioned Ripple as a global leader in the cryptocurrency space.
Garlinghouse's remarks at the Brainstorm Tech summit highlight the challenges and opportunities faced by Ripple in the current regulatory landscape. His critique of the U.S. regulatory approach and emphasis on global expansion reflect the broader issues confronting the cryptocurrency industry. As Ripple continues to navigate these challenges, its experience brings attention to the need for clearer regulatory frameworks that can support innovation while protecting investors. Garlinghouse's vision for a more collaborative and less partisan approach to cryptocurrency regulation offers a pathway to harnessing the full potential of blockchain technology for the benefit of all.
Ripple CTO David Schwartz Weighs in on Crypto Storage Debate, Highlights Risks of Centralized Exchanges
In the ever-evolving crypto landscape, the question of where to store digital assets remains a hot topic. Ripple's Chief Technology Officer, David Schwartz, recently contributed to this ongoing debate, providing critical insights on the potential risks associated with storing cryptocurrencies on centralized exchanges like Coinbase.
The discussion began with a query about Federal Deposit Insurance Corporation (FDIC) insurance for USD held on Coinbase. Schwartz clarified a common misconception: FDIC insurance only protects cash deposits if the bank holding those deposits fails, not if the exchange itself goes under. This distinction is crucial, as it sheds some light on the vulnerability of funds stored on exchanges. Should Coinbase face insolvency and the affiliated bank be unable to cover all liabilities, users could face significant losses.
The Potential Solution: Segregated FDIC-Insured Accounts
The conversation took an intriguing turn when someone suggested that Coinbase could mitigate this risk by using FDIC-insured banks to hold users' USD in segregated accounts. This arrangement, in theory, could protect users' funds even if Coinbase itself encounters financial difficulties. Schwartz acknowledged this as a viable strategy but emphasized the importance of meticulous record-keeping by Coinbase. Accurate records would be essential to ensure that, in the event of a bank failure, each user receives their rightful share of the remaining funds.
Schwartz's comments illuminate a broader issue in the crypto industry: the inherent risks of storing digital assets on centralized platforms. While exchanges like Coinbase offer convenience and accessibility, they also expose users to potential systemic risks. The collapse of a major exchange could result in the loss of user funds, highlighting the need for a more robust understanding of the security measures in place.
In light of these risks, Schwartz's insights serve as a reminder for crypto investors to carefully consider their storage options. Here are some best practices for keeping cryptocurrencies safe:
1. Use Hardware Wallets: Hardware wallets, such as Ledger or Trezor, provide a secure way to store cryptocurrencies offline, away from the vulnerabilities of online platforms.
2. Diversify Storage: Avoid keeping all assets on a single platform. Spread holdings across multiple exchanges and wallets to mitigate risk.
3. Understand the Terms: Be aware of the specific terms and conditions of each platform, including their security measures and insurance policies.
4. Stay Informed: Keep up-to-date with the latest news and developments in the crypto industry to make informed decisions about asset storage.
Schwartz's remarks also shine the spotlight on the need for clearer regulatory frameworks to protect cryptocurrency users. The lack of comprehensive regulations governing exchanges and the security of digital assets leaves investors exposed to significant risks. Greater regulatory clarity and enforcement could help ensure that exchanges implement and maintain robust security measures to protect users' funds.
