Ripple CEO Brad Garlinghouse disclosed that he and co-founder Chris Larsen seriously considered shutting down the company in 2020 after the SEC filed a lawsuit, potentially distributing XRP holdings to shareholders. In a recent interview with KU Hustle, Garlinghouse revealed that the decision to fight the case instead was driven by the need to preserve hundreds of jobs. The prolonged legal battle, spanning four years, reportedly cost the company approximately $150 million in legal fees. The scenario focused on dissolving Ripple as a corporate entity rather than impacting the XRP Ledger or the XRP held by the public.
“We almost decided to shut down the company when the SEC sued us. We were like uh you know like the government has infinite power and resources.”
The SEC’s August 2025 litigation release dismissed its respective appeals, resolving the enforcement action. However, the district court’s final judgment remains in effect, including a $125.04 million civil penalty and an injunction against Ripple.
Strategic Considerations and Corporate Resilience
Garlinghouse explained that Ripple and Larsen had contemplated winding down the company and distributing its XRP holdings to shareholders on a pro rata basis. Instead, they chose to continue operations and fight the legal battle, a decision that preserved jobs but accrued significant legal expenses. The leadership prioritized the company’s survival over a liquidation scenario.
Distinguishing Corporation, Ledger, and Token Holdings
Ripple equity, XRP held by Ripple, the XRP Ledger, and XRP held by the public are distinct entities. The dissolution plan Garlinghouse described involved distributing Ripple’s own XRP holdings to its shareholders, a move that would not jeopardize the ledger or public token holdings. He emphasized that shutting down Ripple would not affect the operational integrity of the XRP Ledger or its broader ecosystem.
Ripple’s XRP reserve provided the financial leverage to pursue a protracted legal defense. While the company’s XRP holdings did not directly fund its legal battle, they represented a strategic resource available to shareholders in the event of dissolution. Instead, leadership opted to navigate the legal challenges, ultimately settling the dispute while maintaining the company’s operational capacity.
