Ripple CEO Brad Garlinghouse said the company seriously considered closing after the U.S. Securities and Exchange Commission sued it in December 2020. He said he and co-founder Chris Larsen discussed distributing Ripple’s XRP holdings to shareholders on a pro rata basis and dissolving the business. The company rejected the shutdown plan because it would have ended hundreds of jobs. Garlinghouse said Ripple chose to defend itself even though the result remained uncertain. The SEC accused Ripple, Garlinghouse and Larsen of conducting unregistered securities sales through XRP, raising over $1.3 billion.
Court Ruling
Judge Analisa Torres issued a split ruling in July 2023, finding that Ripple’s programmatic XRP sales on public exchanges did not amount to securities transactions, but some direct sales to institutional buyers broke securities laws. The court later ordered Ripple to pay a $125 million civil penalty and barred it from repeating unregistered institutional sales.
Aftermath
Ripple continued to expand after the lawsuit, securing a full Markets in Crypto-Assets license in Luxembourg, allowing it to offer regulated crypto services across the European Economic Area. U.S. lawmakers continue to debate market structure rules that could define when digital assets fall under securities or commodities oversight.
Based on reporting from crypto.news.
