Ripple’s CEO, Brad Garlinghouse, at his latest appearance at the KU School of Business, said the company once thought about closing its doors due to the pressure caused by the SEC’s 2020 lawsuit.
Garlinghouse said Ripple faced a major challenge after the SEC case began, with the agency having extensive resources for a long legal fight. He stated that the company needed to decide whether the lawsuit was worth pursuing or not.
The Ripple chief executive said closing the company would have been a simpler path at the time. Ripple could have distributed its XRP holdings among shareholders and informed the SEC that it no longer held XRP, following the agency’s claim regarding XRP.
Ripple Chose Legal Fight Over Closing Operations
Garlinghouse said ending Ripple’s operations would have affected hundreds of employees who depended on the company for their jobs. He added he was pleased the company did not take such a step, even though the choice created major challenges.
The SEC took legal action against Ripple in 2020, claiming that the company, Garlinghouse, and Chris Larsen had offered XRP as an unregistered security. The case continued for several years before both sides settled after Donald Trump returned to office.
A key moment in the case came when Judge Analisa Torres ruled XRP was not a security by itself. The ruling became a major point in the legal dispute between Ripple and the SEC over XRP sales.
Ripple’s Four-Year Legal Battle With SEC
The legal fight lasted about four years and cost Ripple around $150 million. The company continued defending its position while the SEC indicated plans to challenge parts of the outcome through an appeal.
Garlinghouse said the situation changed after Trump won the election and appointed new leadership at the SEC. He described the new approach toward cryptocurrency rules as more constructive compared with the earlier period.
He compared the crypto industry’s need for clear rules with the early internet period. Garlinghouse referred to the 1996 Telecom Deregulation Act, saying clear regulations helped technology companies build confidence among investors.
