Ripple CEO Brad Garlinghouse said the company almost shut down instead of fighting the U.S. Securities and Exchange Commission.
Speaking at the University of Kansas School of Business this week, Garlinghouse said he and co-founder Chris Larsen seriously considered winding down the company after the SEC sued in 2020. They thought about distributing Ripple’s XRP holdings to shareholders on a pro rata basis and dissolving the firm.
Choosing to fight
Garlinghouse described that as the easier path. He said the government had “infinite power and resources.” But they ultimately chose to fight because shutting down would have cost hundreds of jobs. “I’m glad in retrospect, but that was not obvious at the time,” he said.
The SEC sued Ripple in 2020, claiming XRP was an unregistered security. The lawsuit also named Garlinghouse and Larsen personally. Garlinghouse said he met with SEC officials four times between 2017 and 2019 without a lawyer. He claims he was never told XRP might be treated as a security, which shaped his belief that the company had been denied clear rules.
Four-year legal battle
Garlinghouse put Ripple’s legal costs at $150 million over the four-year fight. Ripple eventually prevailed when Judge Analisa Torres ruled that XRP itself is not a security. The two sides settled in May last year after the Trump administration installed new SEC leadership that has taken a more accommodating approach to crypto.
Ripple holds a large amount of XRP. If they had dissolved, Garlinghouse said they could have simply handed those tokens to shareholders and ended the case by ending the company. But they didn’t take that route.
