Ripple came this close to folding in 2020 — Garlinghouse says "shutdown was easier." They didn't 📉🚫

Ripple CEO Brad Garlinghouse has disclosed that the company came close to shutting down entirely after the U.S. Securities and Exchange Commission sued it in 2020, citing the federal government's "infinite power and resources" as the central reason the firm weighed a wind-down. Speaking at the KU School of Business, Garlinghouse said leadership faced a tough decision about whether to fight, noting that closing the company would likely have been the simpler path. Under that scenario, he explained, Ripple would have distributed its XRP holdings to shareholders on a pro rata basis and informed the SEC it no longer held any XRP, given the Commission's position that the token qualified as an unregistered security.

Garlinghouse said the leadership team ultimately concluded that shuttering the firm would have set a damaging precedent for the broader crypto sector. The Ripple CEO remarked that he was glad the company did not choose to wind down, framing the decision as a stand taken on behalf of other crypto startups that might later face similar enforcement actions. He characterized the SEC's posture as a critical threat to U.S.-based crypto firms, reinforcing the company's public rationale for litigating the case to conclusion.

The 2020 SEC complaint alleged that Ripple and its executives conducted an unregistered securities offering through the sale of XRP, raising $1.3 billion through what the Commission described as unlawful distributions. The litigation spanned more than three years and produced partial rulings on whether certain XRP sales to institutional and retail investors constituted securities transactions. The case drew widespread attention from crypto issuers, exchanges, and policymakers tracking how U.S. regulators would treat digital asset sales.

Ripple's decision to continue operating during the suit required sustained legal spending and operational continuity through repeated procedural setbacks. Garlinghouse's remarks underscore the company's framing of the dispute as a defense of the broader crypto industry rather than a purely corporate matter, and they revive discussion of the period in which XRP's market activity was sharply curtailed by delistings on major U.S. trading venues.