Ripple CEO: 2020 SEC Suit Nearly Forced Shutdown

Ripple CEO Brad Garlinghouse recounted that he and co-founder Chris Larsen nearly shut the company after the U.S. Securities and Exchange Commission brought an enforcement action in 2020. Leadership weighed dissolving Ripple and distributing the XRP the company held to shareholders on a pro rata basis before choosing to continue operations and defend the firm in court.

In a recent interview Garlinghouse described the choice as between winding down the company and fighting a prolonged legal battle. He estimated the multi-year defense cost roughly $150 million and said continuing to litigate preserved hundreds of jobs at Ripple.

Garlinghouse stressed the contemplated plan applied to Ripple as a corporate entity and its internal XRP reserve. He noted the XRP Ledger and tokens held by the public are separate: a corporate shutdown would not automatically transfer or erase XRP held by outside holders, and the ledger could continue to operate without the company.

He also said the company’s XRP reserve provided an escape hatch that created options for leadership as the litigation threatened the business’s future, but he stopped short of stating the reserve directly paid legal bills.

“We almost decided to shut down the company when the SEC sued us,” Garlinghouse said, describing the pressure on leadership during the early phase of the case.

A litigation release from the SEC in August 2025 dismissed the parties’ appeals and closed that phase of the dispute, while the district court’s final judgment remained in effect. That judgment includes a $125.04 million civil penalty and an injunction against Ripple.

Garlinghouse attributed the decision to keep operating and defend the company with the preservation of jobs despite the legal expense. He framed the outcome as a choice between distributing the company’s XRP and ceasing operations or mounting a defense and maintaining the firm.