Ripple Almost Chose the Exit Tax: CEO Says Shutdown Was on the SEC Lawsuit Menu 🚪

Ripple CEO Brad Garlinghouse has disclosed that he and co-founder Chris Larsen seriously considered dissolving the company and distributing its XRP holdings to shareholders after the U.S. Securities and Exchange Commission sued Ripple in 2020. Speaking at the University of Kansas School of Business earlier this week, Garlinghouse described the shutdown option as the "easier path" against a government wielding what he called "infinite power and resources."

Under that scenario, Ripple would have handed its XRP stash to shareholders on a pro rata basis and told the SEC it no longer held any XRP, effectively ending the case by ending the company. Garlinghouse said the pair chose to fight instead because winding down would have cost hundreds of jobs, adding that the decision to continue was not obvious at the time. "I'm glad in retrospect, but that was not obvious at the time," he said.

Garlinghouse also disclosed that he met agency officials four times between 2017 and 2019 without a lawyer and was never told XRP might be treated as a security, a fact he said shaped his view that Ripple had been denied clear rules. He pegged Ripple's legal bill from the four-year fight at roughly $150 million, and noted that the SEC's 2020 suit named both him and Larsen personally.

Ripple ultimately prevailed when Judge Analisa Torres ruled that XRP itself is not a security. The case was settled last May after new SEC leadership, installed under the Trump administration, adopted a more accommodating posture toward crypto.