Ripple CEO says firm considered shutdown amid SEC lawsuit

Ripple CEO Brad Garlinghouse has revealed that the company seriously considered shutting down and distributing its XRP holdings to shareholders in the aftermath of a major lawsuit filed by the U.S. Securities and Exchange Commission in December 2020. The disclosure, made during a talk at the University of Kansas School of Business, highlights the existential threat the firm faced at the outset of a legal battle that lasted nearly five years and cost the company approximately $150 million in litigation expenses.

Garlinghouse described the choice to fight the SEC as a difficult one against an agency with vast resources, noting that dissolution would have been the easier path. He said the leadership, including co-founder Chris Larsen, ultimately rejected the shutdown plan to protect hundreds of jobs, despite the uncertain outcome. The SEC's lawsuit alleged that Ripple, Garlinghouse, and Larsen conducted unregistered securities sales through XRP, raising over $1.3 billion.

The case reached a pivotal split ruling in July 2023. U.S. District Judge Analisa Torres found that Ripple's programmatic sales of XRP on public exchanges did not constitute securities transactions. However, she...