Ripple CEO Brad Garlinghouse has revealed that he and co-founder Chris Larsen seriously considered shutting down the company after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit in 2020. In an interview with KU Hustle, Garlinghouse said they felt the government had "unlimited power and resources" at the time.
Closure Plan and Costs
The CEO stated that one option was to close Ripple and distribute its XRP holdings to shareholders as a dividend. However, the plan was abandoned because it would have resulted in hundreds of job losses. Instead, the company chose to fight the case in court. Garlinghouse estimated the four-year legal battle cost approximately $150 million.
XRP Ledger Would Survive
Garlinghouse emphasized that Ripple the company, its XRP holdings, the XRP Ledger, and XRP held by the general public are separate entities. The closure plan involved dissolving the company and distributing its XRP, not shutting down the ledger or causing holders to lose their tokens. Even if Ripple had closed, the XRP Ledger would have continued operating.
SEC Settlement and Aftermath
The SEC lawsuit was resolved in August 2025, with both sides dropping appeals and reaching a settlement. However, the district court's final judgment—including a $125.04 million civil penalty and an injunction—remains in effect. The interview did not explicitly state that XRP reserves covered legal costs, but indicated the reserves gave management an "escape route" when faced with the choice between closure and continuation.