Behind Ripple’s present success in securing a European license, there is a secret newly revealed by its chief executive: the company almost shut its doors. Ripple CEO Brad Garlinghouse admitted that he and co-founder Chris Larsen seriously considered dissolving Ripple and distributing all of its XRP holdings to shareholders on a pro-rata basis - after the SEC sued them in December 2020.
The Easiest Path Against an Opponent with ‘Unlimited Power’
Garlinghouse called the dissolution option the ‘easier path’ when confronting an agency he described as having ‘unlimited power and resources.’ Ripple held a massive amount of XRP; technically, the company could have simply handed those assets over to shareholders and shut down - ending the case by ending the company itself.
What held them back was not a conviction that they would win, but the hundreds of employees who would lose their jobs. ‘I’m grateful looking back, but at the time it was not at all obvious,’ Garlinghouse said during a forum at the University of Kansas School of Business. Ripple ultimately chose to fight, facing an outcome that was completely uncertain at the time.
$150 Million and Four Meetings Without Lawyers
The cost was steep. Garlinghouse estimated that Ripple spent around $150 million on the multi-year legal battle. The SEC had accused Ripple, Garlinghouse, and Larsen of selling XRP as an unregistered security, alleging that more than $1.3 billion was raised. The lawsuit weighed heavily on Ripple’s US business, impacting everything from partnerships to institutional client access.
A particular detail helped shape his firm stance. Garlinghouse stated that he met with SEC officials four times between 2017 and 2019 without legal counsel present, and was never once told that XRP might be treated as a security. For him, this was proof that the company was never given clear rules from the start.
Survived, but the Scars Remain
Judge Analisa Torres eventually issued a split ruling in July 2023: programmatic sales of XRP on public exchanges were not securities transactions, but certain direct sales to institutional buyers violated regulations. Ripple was ordered to pay a $125 million civil penalty and barred from repeating unregistered institutional sales. A settlement bid to reduce the fine to $50 million was rejected, both parties dropped their appeals, and the case was officially closed in August 2025.
Today, Ripple is expanding instead - having recently secured a full MiCA license in Luxembourg, unlocking regulated crypto services across Europe. The irony is stark: while its status is clear across the European continent, legal certainty in its home country still hangs on unfinished legislation. This ‘near dissolution’ admission serves as a stark reminder of how thin the line is between survival and extinction for crypto firms clashing with regulators. Reported by crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
