Ripple Chief Executive Brad Garlinghouse said he and co-founder Chris Larsen seriously considered dissolving the company and distributing its XRP holdings to shareholders on a pro rata basis after the SEC sued in 2020, rather than face years of litigation.
“I’m glad in retrospect, but that was not obvious at the time,” Garlinghouse said on July 12, 2026, speaking at the University of Kansas School of Business.
The SEC alleged Ripple had sold XRP as an unregistered security and named both Garlinghouse and Larsen personally in the lawsuit. Garlinghouse said he had met with SEC officials four times between 2017 and 2019 without legal counsel and was never told XRP might be treated as a security.
The decision to litigate rather than shut down preserved hundreds of jobs at the company. Over four years of litigation, Ripple spent $150 million on legal costs before the case settled in May 2025.
The settlement came after the Trump administration installed new SEC leadership with a more accommodating stance toward crypto. Judge Analisa Torres ruled that XRP itself is not a security, a determination that vindicated Ripple’s position on the token’s regulatory status.
Garlinghouse’s disclosure of the shutdown option reveals the existential pressure the company faced in the early years of the lawsuit. The choice to fight meant committing substantial capital to defense and exposing the company’s leadership to personal legal liability, but it ultimately allowed Ripple to remain operational and preserve shareholder value rather than liquidate holdings during what proved to be a temporary regulatory setback.
