Ripple Labs once considered shutting down and distributing its XRP holdings to shareholders after the SEC sued the company.

Did Ripple Consider Shut Down?

Speaking at a University of Kansas event on July 9, CEO Brad Garlinghouse said “We almost decided to shut down the company when the SEC sued us in December 2020.”

He explained that Ripple could have wound down operations and distributed its substantial XRP (CRYPTO: XRP) holdings to shareholders on a pro rata basis.

"Ripple doesn’t own it anymore, Ripple’s gone. End of story," Garlinghouse said, describing the option executives considered at the time.

However, such a move would have resulted in hundreds of employees losing their jobs and would have represented the easier, rather than the preferable, outcome, he added.

Ripple has since expanded its U.S. operations following the shift toward a more crypto-friendly regulatory environment and has continued building products around payments, stablecoins, custody and institutional blockchain infrastructure.

Ripple’s Fight With The SEC

The SEC accused Ripple of conducting unregistered securities offerings through sales of XRP and named Garlinghouse and co-founder Chris Larsen as defendants.

Garlinghouse said he had met with the SEC several times between 2017 and 2019 without legal counsel because he believed Ripple was engaging with regulators in good faith.

He added that regulators did not tell him during those meetings that they considered XRP a security.

A federal judge later ruled that XRP itself was not necessarily a security and that Ripple’s programmatic sales on exchanges did not constitute securities transactions, though certain institutional sales violated securities laws.

Ripple ultimately spent about $150 million in legal fees fighting the case over roughly four years.

XRP’s Role In Ripple’s Business

Garlinghouse described XRP as a fast and inexpensive settlement asset that Ripple uses within its payments’ technology.

Ripple sells its technology mainly to banks and financial institutions seeking to reduce the cost and friction of cross-border transactions.

In an X post on July 9, Grayscale highlighted the role of major cryptocurrencies in the current market landscape.

While Bitcoin is classified as "digital money" by the asset manager, Ethereum a "world computer," the role of XRP is of global payments placing the asset in a key role in institutional payment infrastructure.

Since December 2020, XRP price has almost doubled compared to current price levels.

In July 2025, prices peaked to all-time highs after the SEC-Ripple legal battle ended.

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