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Ripple considered shutting down and distributing XRP to shareholders

CoinDesk reports Ripple estimated about $150 million in legal fees over four years while fighting the SEC, rather than dissolving after the 2020 lawsuit.

Reported · Written up by our desk · Market Structure

Ripple CEO Brad Garlinghouse said he and co-founder Chris Larsen seriously considered shutting down Ripple and distributing its XRP holdings to shareholders after the U.S. Securities and Exchange Commission sued the company in 2020. Speaking at the University of Kansas School of Business earlier this week, Garlinghouse said distributing XRP pro rata and dissolving would have effectively ended the case by ending the company.

Garlinghouse said the team ultimately chose to fight instead of closing, because shutting down would have cost hundreds of jobs. He said the decision preserved jobs, but the legal battle cost Ripple about $150 million in legal fees over four years.

He added that he met with SEC officials four times between 2017 and 2019 without a lawyer and was never told XRP might be treated as a security. Ripple prevailed when a federal judge ruled that XRP itself is not a security, and the parties settled in May last year following a change in SEC leadership that took a more accommodating stance toward crypto.

According to CoinDesk, the settlement came after the Trump administration installed new SEC leadership. Garlinghouse said looking back he is glad Ripple did not dissolve, though he characterized the outcome as not obvious at the time.

Latest closeXRP $1.090 ▼0.7%

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