Ripple Once Considered Shutdown, XRP Distribution to Shareholders, CEO Reveals

Brad Garlinghouse said he and co-founder Chris Larsen once considered shutting down Ripple and distributing its XRP to shareholders before ultimately deciding to contest the 2020 lawsuit.

Garlinghouse explained that the company came close to closing rather than taking on the U.S. Securities and Exchange Commission, describing it as a difficult choice against an agency he viewed as having vast power and resources.

Speaking earlier this week at the University of Kansas School of Business, he said dissolving the company and distributing XRP holdings proportionally to shareholders was seriously considered, as it would have effectively ended the legal battle.

However, the leadership chose to fight, noting that shutting down would have resulted in significant job losses. In hindsight, Garlinghouse said he is pleased with the decision, though it wasn’t clear-cut at the time.

The SEC filed its lawsuit in 2020, alleging that Ripple conducted unregistered securities sales through XRP and naming both Garlinghouse and Larsen individually. Garlinghouse added that he had met with regulators multiple times between 2017 and 2019 without legal counsel and was never warned that XRP could be classified as a security, reinforcing his belief that the company lacked regulatory clarity.

He estimated Ripple’s legal expenses at around $150 million over the course of the four-year case.

Ripple ultimately secured a key victory when Analisa Torres ruled that XRP itself is not a security. The case concluded in May last year after new leadership at the SEC adopted a more crypto-friendly stance, leading to a settlement between the two parties.