{"id":75318,"date":"2026-07-13T01:53:41","date_gmt":"2026-07-13T01:53:41","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/ripple-almost-shut-down-and-distributed-xrp-after-sec-lawsuit-ceo-reveals\/"},"modified":"2026-07-13T01:53:41","modified_gmt":"2026-07-13T01:53:41","slug":"ripple-almost-shut-down-and-distributed-xrp-after-sec-lawsuit-ceo-reveals","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/ripple-almost-shut-down-and-distributed-xrp-after-sec-lawsuit-ceo-reveals\/","title":{"rendered":"Ripple Almost Shut Down and Distributed XRP After SEC Lawsuit, CEO Reveals"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Ripple came close to shutting down after the SEC filed a lawsuit over XRP.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The company considered distributing its XRP holdings to shareholders.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">A court ruling found that XRP sales on public exchanges were not securities transactions.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Ripple Considered Closing After SEC Lawsuit Put Company at Risk<\/h2>\n<p>Ripple CEO Brad Garlinghouse revealed that the company considered shutting down after the U.S. Securities and Exchange Commission (SEC) <a href=\"https:\/\/news.bitcoin.com\/sec-sue-ripple-over-xrp-cryptocurrency-ceo-xrp-is-not-a-security\/\">filed a lawsuit<\/a> against Ripple and named him and co-founder Chris Larsen in 2020 over <span>XRP<\/span> sales. The decision became one of the most difficult moments of his leadership, with the company weighing whether continuing the legal fight was worth the financial and operational risks.<\/p>\n<p>Garlinghouse said during a KU Hustle podcast interview at the University of Kansas School of Business, published on July 8:<\/p>\n<blockquote>\n<p>\u201cWe almost decided to shut down the company when the SEC sued us \u2026 The company owns a lot of <span>XRP<\/span> \u2026 We could have shut it down and \u2026 just distribute the <span>XRP<\/span> to shareholders on a pro rata basis.<\/p>\n<\/blockquote>\n<p>The SEC lawsuit centered on the regulator\u2019s claim that <span>XRP<\/span> sales involved unregistered securities. Garlinghouse disputed that position, comparing the <span>crypto<\/span> token more closely to <span>bitcoin<\/span>, which he described as a separate digital asset operating on an open network.<\/p>\n<h2>Ripple\u2019s Legal Fight Ended After SEC Appeal Withdrawal and Final Judgment<\/h2>\n<p>Garlinghouse 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\u2019s ability to operate in the domestic market.<\/p>\n<p>The legal battle began in 2020 when the SEC <a href=\"https:\/\/news.bitcoin.com\/sec-sue-ripple-over-xrp-cryptocurrency-ceo-xrp-is-not-a-security\/\">alleged<\/a> Ripple sold $1.3 billion of <span>XRP<\/span> as an unregistered security. In 2023, U.S. District Judge Analisa Torres issued a mixed <a href=\"https:\/\/news.bitcoin.com\/us-judge-rules-xrp-not-necessarily-a-security-on-its-face-sending-xrp-supporters-into-celebration\/\">ruling<\/a>, finding that <span>XRP<\/span> sales on public exchanges were not securities transactions, while sales to institutional investors were treated differently under securities law.<\/p>\n<p>Ripple was later ordered to pay a $125 million civil penalty and accept an injunction related to securities law compliance. Both Ripple and the SEC filed appeals challenging different aspects of the ruling before agreeing to dismiss those filings. The case formally concluded in August 2025 after the appeals were <a href=\"https:\/\/news.bitcoin.com\/xrp-legal-saga-concludes-as-ripple-withdraws-appeal-sec-expected-to-follow\/\">withdrawn<\/a> and the court process ended.<\/p>\n<p>The regulatory environment surrounding <span>cryptocurrency<\/span> also changed after SEC leadership shifted under Chairman Paul Atkins and the Trump administration. The agency moved away from a more aggressive regulation-by-enforcement approach toward deregulation, greater engagement with the <span>crypto<\/span> industry, and a focus on traditional fraud cases rather than broad corporate penalties.<\/p>\n<p>Garlinghouse said that before the SEC filed its lawsuit, he met with SEC officials four times between 2017 and 2019 to explain how Ripple used <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-is-a-blockchain\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">blockchain<\/a> technology and <a href=\"https:\/\/www.binance.com\/en\/price\/xrp\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">XRP<\/a> in its payment system. He said regulators did not indicate during those meetings that <a href=\"https:\/\/www.binance.com\/en\/price\/xrp\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">XRP<\/a> could be considered a security.<\/p>\n<h2>Ripple Continued Operations After Weighing Shutdown Option<\/h2>\n<p>The Ripple chief executive described how the company could have responded to the SEC lawsuit, outlining a scenario in which Ripple might have exited the dispute by distributing its <a href=\"https:\/\/www.binance.com\/en\/price\/xrp\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">XRP<\/a> holdings and dissolving the company.<\/p>\n<p>\u201cYou guys think these are securities. Ripple doesn\u2019t own it anymore. Ripple\u2019s gone now,\u201d he said, describing a hypothetical scenario rather than an action the company took, outlining how Ripple could have responded to the SEC.<\/p>\n<p>He added that such a move would have come at a high cost to employees and the company\u2019s future, stating:<\/p>\n<blockquote>\n<p>\u201cHundreds of people would have lost their jobs. I think that was a bad outcome, but in some ways it was the easier outcome.\u201d<\/p>\n<\/blockquote>\n<p>After deciding not to shut down, Garlinghouse said the choice to continue operating was not clear at the time. \u201cThat was a difficult decision, and obviously I\u2019m glad in retrospect, but that was not obvious at the time,\u201d he stated. Ripple chose to continue operating after weighing the impact on employees and the business.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/ripple-almost-shut-down-and-distributed-xrp-after-sec-lawsuit-ceo-reveals\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) 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. Ripple Considered Closing After SEC Lawsuit Put Company at [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":75319,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/75318"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=75318"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/75318\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/75319"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=75318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=75318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=75318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}