Garlinghouse Reveals Ripple Nearly Shut Down After SEC Lawsuit, Considered Distributing XRP to Shareholders

In a recently surfaced clip, Ripple CEO Brad Garlinghouse revealed that he and company chairman and co-founder Chris Larsen came close to shutting down Ripple entirely in the wake of the SEC's lawsuit against the company. Garlinghouse described the moment as a genuine crossroads, noting that the government's effectively unlimited power and resources made the prospect of fighting back feel daunting.

Garlinghouse explained that the two leaders seriously weighed their options, including a scenario in which Ripple would be wound down and the company's significant XRP holdings would be distributed directly to shareholders. The candid disclosure highlights how existential the SEC action felt to Ripple's leadership at the time it was filed.

Ultimately, Garlinghouse and Larsen chose to contest the lawsuit rather than dissolve the company. That decision led to a multi-year legal battle that became one of the most closely watched cases in crypto regulatory history. The outcome of that litigation has since had broad implications for how digital assets are classified in the United States.

The disclosure adds important historical context to Ripple's legal journey and underscores the high stakes that were present from the very beginning of the SEC action. It also sheds light on the close working relationship between Garlinghouse and Larsen in navigating one of the most difficult periods in the company's history.