Ripple Nearly Shut Down and Handed XRP to Shareholders, CEO Says

Ripple came close to shutting down rather than fighting the U.S. Securities and Exchange Commission, Chief Executive Brad Garlinghouse said this week. He and co-founder Chris Larsen seriously considered winding the company down and handing its XRP holdings to shareholders. Doing so would have ended the SEC's case the simplest way possible: by ending Ripple itself. The company went on to win that case. Garlinghouse's account is a reminder of how close it came to never fighting it.

The easier path

Garlinghouse laid out the decision at the University of Kansas School of Business. Dissolution, he said, was the easier route against a government with "infinite power and resources." Ripple holds a large amount of XRP. It could have distributed those tokens to shareholders on a pro rata basis, closed up, and walked away from the litigation. End the company, and there would be nothing left to sue.

They chose to fight instead. The deciding factor was jobs. Garlinghouse said shutting down would have put hundreds of people out of work, and that outweighed the clean exit. "I'm glad in retrospect, but that was not obvious at the time," he said.

What the case cost

The SEC sued Ripple in 2020, alleging it had sold XRP as an unregistered security. The complaint named Garlinghouse and Larsen personally, putting two executives on the hook alongside the company. He put the total legal bill at $150 million over the four-year fight.

His grievance runs deeper than the money. Garlinghouse said he met SEC officials four times between 2017 and 2019, without a lawyer, and was never told XRP might be treated as a security. That, in his telling, is the case in miniature: a company denied clear rules, then sued for breaking them.

How it ended

The gamble paid off. Judge Analisa Torres ruled that XRP in itself is not a security. The two sides settled in May last year, after the Trump administration installed new SEC leadership that has taken a more accommodating approach to crypto. By then the company Garlinghouse once considered dissolving had spent $150 million to stay alive, and kept the hundreds of jobs he said he chose to protect.

The market read

XRP trades at $1.08, down 1.1% on the day and 2.8% over the week. The 30-day picture is the same shade of red, off 4.4%, a slow bleed rather than a sharp break. Market cap sits at $68.52 billion.

Volume is thin at $747.6 million over 24 hours, which reads more like drift than conviction in either direction. The legal overhang that defined XRP for four years is settled, but the recent tape shows no fresh catalyst pulling it higher. Any move from here depends on demand the current numbers do not yet show.