Brad Garlinghouse said he and co-founder Chris Larsen once weighed shutting down Ripple and distributing its XRP to shareholders rather than fighting the 2020 lawsuit.
He described how the company came close to folding instead of taking on the U.S. Securities and Exchange Commission, noting the challenge of confronting a regulator with extensive power and resources.
Speaking at the University of Kansas School of Business, Garlinghouse said dissolving the company and allocating its XRP holdings to investors on a proportional basis would have effectively brought the case to an end.
In the end, however, Ripple chose to fight, citing the significant job losses that would have followed a shutdown. Garlinghouse said that, in hindsight, he is pleased with that decision, even though it was not an easy call at the time.
The SEC filed suit in 2020, alleging Ripple conducted unregistered securities sales through XRP and naming both Garlinghouse and Larsen personally. He added that he met with regulators multiple times between 2017 and 2019 without legal counsel and was never told XRP could be treated as a security, reinforcing his view that the rules were unclear.
Garlinghouse said the company spent roughly $150 million on legal costs over the four-year battle.
Ripple ultimately prevailed when Analisa Torres ruled that XRP itself is not a security. The dispute was settled in May last year after new SEC leadership took a more crypto-friendly approach.
