Ripple CEO Brad Garlinghouse revealed the company nearly shut down after the SEC’s 2020 lawsuit before deciding to fight in court, a decision that ultimately shaped Ripple’s future.
Ripple CEO Says Company Nearly Shut Down After SEC Lawsuit Before Choosing to Fight
Ripple CEO Brad Garlinghouse has revealed that the company seriously considered shutting down after the U.S. Securities and Exchange Commission (SEC) sued Ripple in December 2020, describing it as one of the most difficult decisions in the firm’s history.
Speaking about the legal battle, Garlinghouse said Ripple and co-founder Chris Larsen weighed the possibility of winding down the business and distributing the company’s XRP holdings to shareholders instead of fighting a lengthy court case. They ultimately rejected that option, choosing to defend the company despite the uncertainty and mounting legal costs.
Key Takeaways
- Ripple nearly shut down after the SEC filed its lawsuit in 2020.
- Brad Garlinghouse said the company considered distributing its XRP holdings to shareholders.
- Ripple decided to challenge the SEC instead of closing its operations.
- The legal battle reportedly cost the company around $150 million in legal expenses.
- Garlinghouse said the decision helped preserve hundreds of jobs and allowed Ripple to continue growing.
Ripple Considered Closing Its Doors
According to Garlinghouse, shutting down the company appeared to be the easier path after regulators accused Ripple of conducting an unregistered securities offering involving XRP.
He explained that Ripple could have dissolved the company and distributed its XRP holdings to shareholders, effectively ending its operations. However, company leaders believed doing so would have meant giving up on employees, customers, and the broader vision for Ripple’s payment technology.
Instead, Ripple chose to remain operational and contest the SEC’s allegations in court.
The SEC Lawsuit Changed Ripple’s Future
The SEC sued Ripple Labs, Brad Garlinghouse, and co-founder Chris Larsen in December 2020, alleging that XRP sales constituted an unregistered securities offering worth more than $1.3 billion. Ripple denied the allegations and maintained that XRP is a digital asset rather than a security.
Garlinghouse said the legal battle lasted for several years and cost the company approximately $150 million in legal fees. Despite those expenses, he believes defending the company was the right decision because it protected Ripple’s business and workforce.
Ripple Continued Growing Despite the Case
Although the lawsuit created significant uncertainty, Ripple continued expanding its global payments business throughout the legal proceedings.
The company has since broadened its focus into areas including cross-border payments, digital asset custody, stablecoins, and institutional blockchain infrastructure. Garlinghouse has also pointed to a more supportive regulatory environment in the United States as an opportunity for continued growth.
His comments offer a rare look at how close one of the cryptocurrency industry’s largest companies came to ending its operations during one of the sector’s most closely watched legal disputes.
Why It Matters
Garlinghouse’s remarks highlight the pressure that regulatory uncertainty placed on major cryptocurrency companies in recent years. Rather than shutting down, Ripple chose to fight the lawsuit—a decision that helped keep the company operating and preserved hundreds of jobs.
The revelation also underscores how regulatory actions can shape the future of blockchain companies and influence broader market confidence in digital assets.
