TLDR
- Ripple considered shutting down after the SEC filed its lawsuit in 2020.
- The company weighed distributing its XRP holdings to shareholders.
- Brad Garlinghouse said the closure could have eliminated hundreds of jobs.
- Ripple spent about $150 million defending itself during the legal dispute.
- The case formally ended in August 2025 after both sides withdrew appeals.
Ripple once considered closing its operations and distributing its XRP holdings to shareholders, CEO Brad Garlinghouse said. The option emerged after the SEC sued the company and its senior leaders in 2020. Management ultimately rejected the plan because it threatened jobs, operations, and the company’s long-term future.
Shutdown Option Emerged After SEC Lawsuit
Garlinghouse discussed the decision during a KU Hustle podcast interview published on July 8. He said Ripple examined whether continuing the legal battle justified the financial and operational pressure. Ripple also considered distributing its XRP holdings among shareholders based on their ownership stakes.
“We almost decided to shut down the company when the SEC sued us,” Garlinghouse said.
He explained that the company could have transferred its XRP reserves before ending operations. However, that path would have immediately ended the business and displaced hundreds of workers.
Garlinghouse described the shutdown route as easier in some respects but harmful overall.
“Hundreds of people would have lost their jobs,” he said during the interview. Ripple instead continued operating, although executives lacked certainty about the outcome.
Court Battle Cost $150 Million
The SEC accused the company of raising $1.3 billion through unregistered XRP sales. It also named Garlinghouse and co-founder Chris Larsen as defendants in the enforcement case. Ripple disputed the regulator’s view and argued that XRP operated as a separate digital asset.
Garlinghouse said the legal dispute generated about $150 million in legal expenses. The case also stalled Ripple’s American business for roughly five years. Meanwhile, regulatory uncertainty limited domestic growth and complicated planning across its operations.
Judge Analisa Torres issued a divided ruling in 2023 on different categories of XRP sales. She found that public exchange sales did not qualify as securities transactions. However, the court treated direct institutional sales differently under federal securities law.
Appeals Ended, and Company Continued
The court later imposed a $125 million civil penalty and issued a compliance injunction. Ripple and the SEC appealed separate parts of the judgment, extending the dispute beyond the initial ruling. Both parties later agreed to withdraw their appeals.
The litigation formally ended in August 2025 after both parties dismissed their remaining challenges. Garlinghouse said management now viewed the decision to continue more positively. However, he stressed that the correct choice remained unclear when leaders faced it.
Ripple continues operating after rejecting the shutdown and shareholder distribution proposal. The decision preserved the workforce while the company challenged the SEC’s claims through federal court. The legal case has ended, and the proposed closure never moved beyond internal consideration.
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