Image Credit: Shutterstock
Ripple CEO Brad Garlinghouse said the company once considered shutting down and distributing its XRP holdings to shareholders after the U.S. Securities and Exchange Commission sued the company in 2020.
Garlinghouse said during a University of Kansas School of Business appearance that he and co-founder Chris Larsen looked at winding down the business before deciding to fight the SEC case.
XRP Holdings Could Have Gone to Shareholders
Garlinghouse said Ripple owned a large amount of XRP at the time and could have distributed those holdings to shareholders on a pro rata basis.
The option was not presented as a formal plan that moved forward. It was a shutdown scenario considered during the early pressure of the case, when Ripple faced legal risk and market uncertainty.
Garlinghouse said the easier route would have been to close the company. Ripple chose to continue because shutting down would have cost hundreds of jobs and ended the business before the courts could test the SEC’s claims.
SEC Case Started in December 2020
The SEC sued Ripple, Garlinghouse and Larsen in December 2020. The agency alleged Ripple raised money through unregistered securities offerings involving XRP. The case quickly affected XRP liquidity, with several platforms reducing or halting support for the token.
Garlinghouse said he had met SEC officials several times before the lawsuit and was not told XRP would be treated as a security. That became part of Ripple’s argument that the industry had not received clear rules before enforcement action arrived.
Ripple’s legal costs reached about $150 million over the four-year fight, according to Garlinghouse.
Court Split XRP Sales in Ruling
The case later produced a mixed result. U.S. District Judge Analisa Torres found that Ripple’s institutional XRP sales violated securities registration rules. The court also found that certain programmatic sales and other distributions did not meet the same standard.
Ripple was ordered to pay a $125 million civil penalty and remains subject to an injunction covering future violations of registration provisions. The SEC and Ripple later filed a joint stipulation dismissing their appeals, ending the civil enforcement action in August 2025.
Garlinghouse Says Ripple Chose to Fight
Garlinghouse’s comments show that Ripple considered a shutdown path before deciding to continue operating through the SEC case.
The company did not shut down, and XRP remained one of the largest crypto assets by market value during the litigation.
The case is now closed, but Garlinghouse said Ripple’s early choice was between winding down and fighting a lawsuit that could have ended the company before a court ruling.
