Ripple nearly closed after SEC XRP lawsuit
Share
- Ripple considered shutting down after the SEC sued the company over XRP (CRYPTO:XRP) in 2020.
- The company chose to fight instead of closing and distributing its XRP holdings to shareholders.
- Ripple later won a key court ruling that XRP is not a security in itself.
Ripple nearly shut down after the US Securities and Exchange Commission sued the company over XRP (CRYPTO:XRP) in 2020, CEO Brad Garlinghouse said.
Garlinghouse said he and co-founder Chris Larsen considered closing Ripple and distributing its XRP holdings to shareholders instead of fighting the lawsuit.
“We almost decided to shut down the company when the SEC sued us… hundreds of people would have lost their jobs,” said Ripple CEO Brad Garlinghouse.
Ripple CTO Emeritus David Schwartz said the company's lawyers believed Ripple could not survive the case and advised its leaders to reach a quick settlement.
Ripple decided to continue fighting the lawsuit, and Judge Analisa Torres later ruled that XRP is not a security in itself, while the case was settled in May last year.
Garlinghouse said he met SEC officials four times between 2017 and 2019 without a lawyer and was never told XRP could be treated as a security.
Schwartz also said the SEC's decision to charge Garlinghouse and Larsen personally may have been intended to pressure Ripple into settling, although he said his comments about possible outside influence were speculation without evidence.
