Ripple co-founder Chris Larsen's donation of XRP to US Vice President Kamala Harris has raised concerns in the crypto community. It comes at a time when Ripple is facing a lawsuit from the US Securities and Exchange Commission (SEC). Many are now wondering whether the donation could have any impact on the ongoing legal proceedings.
The SEC has previously indicated that it does not consider XRP a security, but questions have been raised about whether Larsen's donation could still impact the case. Some legal experts have suggested that the process of converting XRP into fiat currency could require oversight from the SEC.
Pro-XRP attorney Bill Morgan commented that the SEC did not make judgments about the XRP donations, arguing that the transactions do not constitute investment contracts. Some experts believe that Larsen's contribution is separate from the Ripple case.
The SEC ultimately did not seek summary judgment against Ripple for gifts, giveaways and donations. Those XRP no doubt were eventually on-sold.
Why would the SEC care about Larsen’s donation for Harris. A donation is obviously not an investment contract and the SEC has accepted… https://t.co/2nt3BqlmQ5 pic.twitter.com/bVdq4U8zWq— bill morgan (@Belisarius2020) October 22, 2024
Criticism of society and legal issues
Criticism has surfaced, particularly in the XRP community. Some believe Larsen’s support for Harris was ill-timed, as they believe Ripple’s leadership should be focused on the lawsuit rather than political donations. Legal expert MetaLawMan even suggested that the transaction may require SEC approval due to XRP’s involvement.
The debate led to further discussion of Ripple’s actions. Ripple CEO Brad Garlinghouse defended Larsen’s right to support any political candidate, but stressed the need for clear regulations on cryptocurrencies. Garlinghouse warned that the current lack of regulatory clarity is holding back the crypto industry.
Read Also: Messari Founder Declares XRP 'Dead' Amid Ripple Founder's $10M XRP Donation to Harris Campaign
Other prominent figures weighed in. Former Messari CEO Ryan Selkis criticized the donation, accusing Ripple of exploiting retail investors. Selkis also claimed that XRP has lost value compared to stablecoins, questioning Ripple’s impact on financial innovation.
The timing of the donation has sparked speculation about whether it will increase scrutiny from the SEC. Gary Gensler, the current SEC chairman, remains committed to strict cryptocurrency regulations, with critics arguing that his approach is stifling innovation in the U.S. crypto market.
