Ripple CEO Reveals Company Considered Shutdown After 2020 SEC Lawsuit During Speech at University of Kansas Business School
Ripple CEO Brad Garlinghouse revealed during a speech at the University of Kansas Business School that the company seriously considered shutting down after the SEC lawsuit in 2020, proposing to distribute the XRP held proportionally to shareholders and dissolve the company to end the litigation.
Garlinghouse discussed this plan with co-founder Chris Larsen, believing it would be a relatively easy path against a regulatory body with unlimited resources and power. However, they ultimately chose to fight back due to the potential unemployment of hundreds of employees, with the litigation costing approximately $150 million.
In the market mechanism, institutional investors and XRP holders faced selling pressure and price collapse due to the lawsuit, which led to exchanges delisting XRP and resulting in liquidity depletion. Ripple maintained its existence through legal resistance, while regulatory actions put pressure on crypto companies in general, exposing the personal asset risks of the founding team.
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Garlinghouse has previously met with the SEC multiple times to discuss the use of XRP, without receiving any warnings regarding its classification as a security. However, in December 2020, he was sued along with the company, and he was also accused of selling XRP, highlighting a historical shift in regulation from compliance guidance to aggressive enforcement. On the capital front, Ripple chose to invest approximately $150 million in legal resources to fight back rather than distributing XRP and dissolving the company, aiming to protect employee jobs and business continuity while using the lawsuit to clarify XRP's non-security status to restart market expansion in the U.S. Similar to the regulatory pressure faced by crypto companies like Coinbase, Ripple is currently transitioning from a defensive to an offensive stance, expanding its industry influence through university collaborations such as sponsoring XRP jerseys at the University of Kansas. This fundamentally relates to regulatory changes: the traditional securities framework faces jurisdictional conflicts with decentralized assets, and lawsuits force capital to shift from compliance uncertainty to proactive litigation and lobbying, as the lack of clear rules means companies can only establish legal boundaries through the courts rather than through prior guidance. ABAB News · Cognitive Law
Under unlimited regulatory power, persistence can reshape rules more than surrender.
Corporate survival = resource leverage × employee anchor points, rather than merely legal victories or defeats.
Ambiguous boundaries create panic; clear rulings can release long-term capital.