Ripple CEO says SEC suit nearly pushed company to shut down

Ripple CEO Brad Garlinghouse said he and co-founder Chris Larsen seriously considered shutting the company down after the SEC sued in 2020 and distributing Ripple's XRP holdings to shareholders.

In a KU Hustle interview, Garlinghouse said they chose to fight instead because closing Ripple would have cost hundreds of jobs. He estimated the four-year legal battle cost the company about $150 million. The scenario concerned Ripple as a company, rather than a shutdown of the XRP Ledger or a loss of XRP held by the public.

We almost decided to shut down the company when the SEC sued us. We we were like uh you know like the government has infinite power and resources.

Brad Garlinghouse CEO • Ripple

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The SEC's August 2025 litigation release dismissed their respective appeals, resolving the enforcement action. However, the district court's final judgment remained in effect, including a $125.04 million civil penalty and an injunction against Ripple.

Garlinghouse said Ripple and Larsen had considered winding down the company and distributing its XRP holdings to shareholders on a pro rata basis. They chose to continue operating and fight the case, a decision Garlinghouse said preserved hundreds of jobs but ultimately cost about $150 million in legal fees.

A corporate decision with XRP at the center

Conceptual diagram separating the crypto company, its token reserve, a decentralized ledger network and public token holders.

Ripple equity, XRP held by Ripple, the XRP Ledger, and XRP held by the public are different things. The plan Garlinghouse described concerned dissolving Ripple and distributing the company's XRP holdings to its shareholders. It did not imply that the ledger would shut down or that XRP held by the public would be transferred or lost.

Ripple could have shut down and the XRP Ledger still would have kept running. Garlinghouse wasn't making a call on XRP's price or suggesting the network or existing holders would be affected by the company's fate.

Ripple's XRP reserve gave the company a way out if it chose to shut down. Instead, leadership stayed the course, accepting years of litigation and mounting legal bills in exchange for keeping the business alive.

The interview stops short of saying Ripples XRP reserve paid for its defense. What it reveals is the leverage that reserve gave its leaders when the choice narrowed to fighting on or shutting down.