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Ripple CEO Brad Garlinghouse said the company seriously considered shutting down after the U.S. SEC sued it in late 2020, disclosing the contingency for the first time in a public interview. He told the audience Ripple could have wound down operations by distributing its XRP holdings to shareholders and telling regulators it no longer held the token, then walked away.
Why it matters
The decision to keep fighting carried real cost. Garlinghouse framed the alternative as a clean exit that would have eliminated hundreds of jobs at the company. Instead, Ripple chose a multi-year legal battle that ultimately produced a 2023 court ruling finding XRP was not a security when sold to retail investors on exchanges, a partial win that reshaped how U.S. courts classify digital assets.
Market impact
XRP's price and legal status have tracked the lawsuit's arc closely since 2020, and the case became a reference point for later SEC actions against Coinbase, Binance, and other token issuers. Garlinghouse's comments also land as Ripple continues pushing for a spot XRP ETF and expanding its RLUSD stablecoin, efforts that depend on a regulatory backdrop the company helped harden by refusing to settle early.
Source: [Ripple Almost Shut Down After SEC Lawsuit, Brad Garlinghouse Says — CoinGape](https://coingape.com/ripple-almost-shut-down-after-sec-lawsuit-brad-garlinghouse-says/)
Frequently asked questions
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When did the SEC sue Ripple?
The U.S. SEC filed its lawsuit against Ripple in late December 2020, alleging that XRP was an unregistered security.
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What was the 2023 XRP ruling?
A U.S. district court ruled in 2023 that XRP sold to retail investors on exchanges did not constitute a securities offering, a partial win for Ripple that narrowed how its sales were classified.
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Why didn't Ripple settle or shut down?
CEO Brad Garlinghouse said winding down would have meant distributing XRP holdings to shareholders and eliminating hundreds of jobs. Ripple chose to keep fighting through the multi-year case.
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Is a spot XRP ETF coming?
Ripple has been pushing for a spot XRP ETF alongside several asset managers, though no U.S. approval has been granted yet. The 2023 ruling is widely seen as a key precedent that could support eventual filings.
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What is RLUSD?
RLUSD is Ripple's U.S. dollar-pegged stablecoin, launched as part of the company's broader push into institutional payments and on-chain liquidity beyond XRP.
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