Ripple CEO Says Company Nearly Shut Down After SEC XRP Lawsuit

Ripple CEO Brad Garlinghouse has revealed that the company seriously considered shutting down after the U.S. Securities and Exchange Commission (SEC) filed its lawsuit against Ripple in 2020, citing the immense challenge of fighting a federal regulator with virtually unlimited resources.

Speaking at the KU School of Business, Garlinghouse recalled that Ripple faced one of the toughest decisions in its history after the SEC accused the company of conducting unregistered securities sales through XRP. He said closing the business may have been the easier option because the company could have distributed its XRP holdings to shareholders on a pro-rata basis and informed regulators it no longer held the token the SEC claimed was a security.

However, Garlinghouse explained that shutting down would have cost hundreds of employees their jobs and ultimately would have been the wrong decision. Instead, Ripple chose to defend itself in court despite the financial and legal burden. He added that he is grateful the company stayed the course, even though the process was far from easy.

The SEC's lawsuit also named Garlinghouse and Ripple co-founder Chris Larsen, alleging they personally sold XRP as an unregistered security. In a landmark ruling, Judge Analisa Torres determined that XRP itself is not a security, marking a major victory for Ripple and the broader crypto industry. The years-long legal battle was later settled after the Trump administration took office.

The XRP community has since pointed to Ripple's recovery as evidence of the company's resilience. Community member BankXRP noted that Ripple has fully restored its U.S. operations while expanding internationally through regulatory approvals and institutional partnerships.

Ripple recently secured a Markets in Crypto-Assets (MiCA) license in Europe, strengthening its regulatory position across the region. BankXRP also highlighted growing adoption of the XRP Ledger (XRPL), claiming financial institutions are increasingly building on the network rather than simply exploring its potential.

Reflecting on Ripple's journey, the community member argued that the company has evolved from a project many dismissed during the SEC lawsuit into a key player in institutional blockchain adoption. According to BankXRP, market downturns and legal battles test conviction but do not stop projects with long-term utility and strong industry support.