Ripple CEO Brad Garlinghouse revealed during a speech at the University of Kansas School of Business in July that after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against it in 2020, he and co-founder Chris Larsen seriously considered shutting down Ripple and distributing the company's held XRP to shareholders proportionally.
SEC met four times without being told XRP was a security; lawsuit costs reached $150 million
According to Garlinghouse’s account, the SEC sued Ripple starting in 2020, alleging that it sold XRP as an unregistered security, and named Garlinghouse and Larsen as defendants. Garlinghouse said that between 2017 and 2019, he met SEC officials four times without a lawyer present, but was never told that XRP might be considered a security; he believes this situation deprived the company of clear regulatory rules and a fair chance to be notified.
The lawsuit lasted about four years, and Garlinghouse estimated that Ripple spent about $150 million on the case.
Ripple ultimately wins: Judge Torres rules XRP is not a security
According to reports, Ripple ultimately prevailed in its lawsuit: Federal Judge Analisa Torres ruled that XRP itself is not a security. Last year (2025) in May, after the SEC’s new leadership—appointed by the Trump administration with a more lenient stance toward crypto—Ripple and the SEC reached a settlement, ending the four-year legal battle.
In his speech, Garlinghouse said that looking back on the decision at the time, he was glad he chose to fight it out—if the company had opted to dissolve, it wouldn’t have reached today’s outcome.
Frequently Asked Questions
Why did Garlinghouse consider shutting down Ripple in 2020?
Based on Garlinghouse’s remarks at the University of Kansas speech, he believed that in the face of a government agency with “unlimited power and resources,” dissolving the company after distributing XRP held by it to shareholders was the easier option; he also said that the four SEC meetings from 2017 to 2019 never informed him that XRP might be a security, which made him feel the rules were unfair.
What was the final outcome of the Ripple lawsuit?
According to reports, Judge Analisa Torres ruled that XRP itself is not a security; in May 2025, after the SEC’s new leadership under the Trump administration took office, Ripple and the SEC reached a settlement, ending the four-year litigation. During the lawsuit, Garlinghouse estimated Ripple spent about $150 million.
What is the significance of the ruling that XRP is not a security for the crypto industry?
According to reports, Judge Torres’ ruling established a precedent that XRP itself (i.e., the token circulation in the secondary market) does not constitute a security, providing some reference for the legal status of other crypto tokens; the specific regulatory impact will depend on the SEC’s subsequent policies and later court rulings.
