Ripple CEO Brad Garlinghouse revealed that the company was on the brink of shutting down immediately after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against it in December 2020. He made the remarks during a lecture at the University of Kansas School of Business on March 13, 2025, recounting the immense pressure the firm faced from the regulator's 'unlimited power and resources.'
Near-Death Experience for Ripple
Garlinghouse described the period following the SEC's suit as a fight for survival. He stressed that XRP is not a security representing equity in the company but a token designed for payments. Ripple built fast and cheap remittance technology on XRP, but the network runs on open-source code, and Ripple cannot control the token. The SEC, however, viewed XRP as a security and alleged that Ripple and Garlinghouse sold unregistered securities.
The CEO noted that he met with SEC officials four times between 2017 and 2019, and none of them warned that XRP might be considered a security. 'I thought, why would I need a lawyer?' he recalled, explaining that the meetings were about explaining how the technology was used. The lawsuit changed everything, and Garlinghouse criticized the SEC for trying to drop the individual case while maintaining the action against the company, calling the process 'unethical.'
Legal Battle and Regulatory Shift
Ripple spent about $150 million on the legal fight that lasted more than four years. The company ultimately won, but the SEC has left the possibility of an appeal open. Garlinghouse said the election of Donald Trump as president changed the atmosphere, as the new SEC leadership adopted a more constructive stance toward digital assets. He compared the need for clear crypto rules to the 1996 telecommunications deregulation that fueled tech growth, arguing that predictable regulations are essential for investment and industry expansion.
The case became a symbolic event for U.S. crypto regulation. While the debate over XRP is not over, Garlinghouse's comments underscore that the industry craves regulatory clarity over uncertainty.