Ripple nearly shut down after the U.S. Securities and Exchange Commission (SEC) sued the company, with CEO Brad Garlinghouse considering whether to end operations, distribute XRP holdings to shareholders, and close the business.
Key Takeaways
Ripple came close to shutting down after the SEC filed a lawsuit over XRP.The company considered distributing its XRP holdings to shareholders.A court ruling found that XRP sales on public exchanges were not securities transactions.Garlinghouse said during a KU Hustle podcast interview at the University of Kansas School of Business, published on July 8:
Ripple’s Legal Fight Ended After SEC Appeal Withdrawal and Final JudgmentGarlinghouse said Ripple spent $150 million on legal bills during the four-year dispute with the SEC, while its U.S. business remained largely stagnant for about five years after the lawsuit began. He said the case created prolonged uncertainty around Ripple’s ability to operate in the domestic market.
Ripple Continued Operations After Weighing Shutdown Option“You guys think these are securities. Ripple doesn’t own it anymore. Ripple’s gone now,” he said, describing a hypothetical scenario rather than an action the company took, outlining how Ripple could have responded to the SEC.
He added that such a move would have come at a high cost to employees and the company’s future, stating:
“Hundreds of people would have lost their jobs. I think that was a bad outcome, but in some ways it was the easier outcome.”
After deciding not to shut down, Garlinghouse said the choice to continue operating was not clear at the time. “That was a difficult decision, and obviously I’m glad in retrospect, but that was not obvious at the time,” he stated. Ripple chose to continue operating after weighing the impact on employees and the business.
