XRP Ripple dissolved weeks after the U.S. Securities and Exchange Commission sued the company in 2020, CEO Brad Garlinghouse revealed in a KU Hustle podcast interview at the University of Kansas School of Business, published July 8.
The disclosure reframes the entire SEC versus Ripple legal battle as not just a court battle over token classification, but as an existential crisis that nearly wiped one of crypto’s most prominent payments companies and the primary institutional backer of the XRP token off the map.
Did you know that Ripple almost completely shut down when the SEC filed its first complaint?
Although the public knows that Ripple won, few people realize how close they came to throwing in the towel, or that Brad Garlinghouse proactively met with the SEC four times before the trial without a single… pic.twitter.com/XSZ0qQqCKO
— XRP Myth Buster (@XRPMythBuster) July 11, 2026
This bombshell from Brad Garlinghouse comes as XRP USD begins the week at $1.08, down -1.3% in the last 24 hours, with over $828 million in daily trading volume.
As for ETF flows, Ripple ETFs closed last week with modest inflows of $107,000, bringing the overall total to +$1.4 billion since their launch in November 2025, according to CoinGlass data.
Ripple considered distributing XRP and walking away
Garlinghouse said Ripple’s internal calculus was difficult: the company holds a large XRP reserve, and a viable response to the SEC lawsuit was to distribute those holdings to shareholders on a pro rata basis and go out of business.
“We almost decided to shut down the company when the SEC sued us… The company owns a lot of XRP… We could have shut it down and… just distributed the XRP to shareholders on a pro rata basis,” Garlinghouse said.
He put the hypothetical dissolution bluntly: “You think these are securities. Ripple no longer owns them. Ripple is gone now.” For XRP holders, this scenario would have meant a token without its primary corporate manager, institutional sales operations, or payment network development budget – a structurally different asset than the one trading today.
Garlinghouse acknowledged that the shutdown path had a certain cold logic. “Hundreds of people would have lost their jobs. I think it was a bad outcome, but in some ways it was the easier outcome,” he said. Ripple chose to fight instead, a decision he described as anything but obvious at the time: “It was a tough decision, and obviously I’m happy in hindsight, but it wasn’t obvious at the time.”
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$150 million in legal fees, five years of stagnation in the United States
Can Ripple’s stablecoin regain its glory?
After reaching an ATH bid of over $1.81 billion in early June, @Ripple’s $RLUSD has contracted to just $1.53 billion at the time of writing. $XRP’s native stablecoin is now the 9th largest stablecoin by market capitalization, behind other new entrants like… pic.twitter.com/6qaKVb3JGf
– BSCN (@BSCNews) July 13, 2026
The cost of staying in the fight was high. Garlinghouse said Ripple spent $150 million on legal fees over four years, while its U.S. operations remained largely frozen for about five years after the trial began.
The SEC’s December 2020 complaint alleged that Ripple sold $1.3 billion worth of XRP as an unregistered security, an accusation that caused immediate market damage, with the price of
Garlinghouse also noted that before filing the complaint, he met with SEC officials four times between 2017 and 2019 to explain how Ripple’s blockchain-based payment system used XRP. Regulators never indicated during these sessions that XRP could be considered a security.
The crypto legal battle reached its clearest resolution in July 2023, when U.S. District Judge Analisa Torres issued a split decision: XRP is not a security when sold on public exchanges, although institutional sales are treated differently under securities law.
The distinction that XRP Ripple is not a security in retail markets has become a historical precedent in how tokens are classified in the industry. XRP’s market positioning changed significantly once this clarity emerged.
Ripple was ordered to pay a civil penalty of $125 million, down sharply from the $2 billion initially sought by the SEC. Both sides appealed, then agreed to dismiss them. The case officially concluded in August 2025 after appeals were withdrawn.
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A regulatory change helped close the case
SEC CHAIRMAN PAUL ATKINS JUST ANNOUNCED "CRYPTO PROJECT" AND IT’S BIGGER THAN MOST PEOPLE THINK
This is what he said:
"Over the past year, we have deliberately responded to President Trump’s call to make America the crypto capital of the world. Through what we call…
– WOLF Bitcoin (@WOLF_Bitcoin_) July 12, 2026
SEC CHAIRMAN PAUL ATKINS JUST ANNOUNCED "CRYPTO PROJECT" AND IT’S BIGGER THAN MOST PEOPLE THINKThe broader environment for crypto regulation has also changed significantly in the final stretch of the case. Under the leadership of SEC Chairman Paul Atkins and the Trump administration, the agency has abandoned its previous stance of regulation by enforcement and moved toward greater industry engagement and a focus on traditional fraud cases rather than sweeping corporate sanctions.
This change helped create conditions in which both sides found an acceptable solution. Garlinghouse has since publicly welcomed the SEC’s new direction. Ripple’s post-trial business strategy now targets the global payments market, with the legal burden lifted and the US injunction quashed.
For the XRP market, the survival story has a direct implication: the asset’s current legal status and price trajectory, including a roughly 400% rise between the November 2024 election and early 2026, are inseparable from Garlinghouse’s decision to absorb $150 million in costs rather than hand shareholders a bag of tokens and shut down the company.
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The post XRP Ripple Was Weeks Away From Closing SEC Trial Reveals Garlinghouse appeared first on 99Bitcoins.
