Key facts
- Ripple CEO Brad Garlinghouse stated the company nearly shut down after the SEC sued it in 2020.
- Garlinghouse cited the government's unlimited resources as a reason for considering closure.
- The alternative considered was distributing XRP holdings to shareholders.
- Ripple decided against shutting down to prevent hundreds of job losses.
- A judge ruled that XRP is not a security.
- Ripple has since secured new licenses and is reportedly fully operational in the U.S.
Ripple CEO Brad Garlinghouse has disclosed that the company was on the brink of shutting down following the Securities and Exchange Commission's (SEC) lawsuit filed in 2020. Speaking at the KU School of Business, Garlinghouse explained that the government's seemingly infinite resources presented a significant challenge, making the prospect of closing the company a difficult but considered option.
He elaborated that an easier path would have involved distributing Ripple's XRP holdings to shareholders on a pro rata basis and informing the SEC that the company no longer held XRP, which the commission had deemed a security. However, Garlinghouse expressed satisfaction that this decision was not made, as it would have led to hundreds of employees losing their jobs.
The SEC's lawsuit, filed in December 2020, accused Ripple and its executives, including Garlinghouse and co-founder Chris Larsen, of selling XRP as an unregistered security. The long-running legal battle eventually saw a settlement last year. Notably, Judge Analisa Torres had previously ruled that XRP itself is not a security.
Community members, such as BankXRP, have reflected on Ripple's resilience, noting the company's U.S. business is fully operational and that it has secured licenses in various jurisdictions, including a recent MiCA-compliant EU license. The community member highlighted that despite being written off in 2020, Ripple is now central to institutional adoption, with banks actively building on the XRP Ledger.