Ripple nearly shut down after SEC lawsuit, says CEO

Ripple nearly shut down after the SEC lawsuit in 2020, but leadership chose to fight, preserving jobs despite major legal costs. The case ended with a ruling that XRP is not a security.

Ripple CEO Brad Garlinghouse revealed that the company seriously considered shutting down after the SEC filed a lawsuit against it in 2020. Alongside co-founder Chris Larsen, Garlinghouse discussed dissolving Ripple and distributing its XRP holdings to shareholders as an alternative to a lengthy legal battle. Legal advisers reportedly recommended capitulation due to the government's vast resources. Despite this, Ripple’s leadership ultimately chose to fight the lawsuit. This decision preserved hundreds of jobs but resulted in significant legal expenses. Garlinghouse emphasized that closing the company would have been easier, but it would have negatively impacted employees. The case, seen as one of the most significant regulatory actions in the crypto industry, concluded after a federal judge ruled that XRP itself is not a security. Garlinghouse’s comments highlight the intense pressure Ripple faced and the broader regulatory challenges in the crypto sector.