Ripple once weighed shutting down and handing XRP to shareholders, CEO says
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
AI-generated summary based on the linked source; not independently verified. This is not investment advice. Verify market-moving details at the original publisher before acting. See our editorial policy, AI content policy, and financial disclaimer.
Summary
Ripple’s CEO Brad Garlinghouse revealed that he and co-founder Chris Larsen seriously contemplated shutting down Ripple and distributing its XRP tokens directly to shareholders after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the company in 2020. This legal battle centered on the SEC’s claim that XRP was an unregistered security. Garlinghouse described the potential shutdown as the easier option given the SEC’s vast resources, but they ultimately chose to fight to preserve hundreds of jobs within the company.
The SEC's lawsuit named both Garlinghouse and Larsen personally, and the legal proceedings stretched over four years, incurring approximately $150 million in legal fees for Ripple. Garlinghouse also mentioned that prior to the lawsuit, he met with SEC officials multiple times without legal counsel and was never warned that XRP might be classified as a security. This lack of clear regulatory guidance influenced Ripple’s decision to contest the charges rather than settle or fold.
Why it matters
The legal battle concluded last year when a federal judge ruled that XRP itself is not a security, a significant victory for Ripple and the broader crypto community. The case settled after the SEC underwent leadership changes, with the new administration adopting a more crypto-friendly stance. This outcome not only validated Ripple’s position but also set an important precedent for regulatory treatment of digital assets in the United States, potentially shaping future enforcement actions and industry regulations.