Ripple CEO Brad Garlinghouse revealed in 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 in 2020, he and co-founder Chris Larsen seriously considered shutting down Ripple and distributing the XRP held by the company to shareholders on a pro-rata basis.
SEC met four times without being told XRP was a security; legal fees totaled $150 million
According to Garlinghouse’s remarks, the SEC sued Ripple starting in 2020, alleging that XRP was being sold as an unregistered security, and named Garlinghouse and Larsen as defendants. Garlinghouse said that between 2017 and 2019, he met with SEC officials four times without an attorney present, but was never informed that XRP might be considered a security; he believes this 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 won the lawsuit in the end: Federal Judge Analisa Torres ruled that XRP itself is not a security. Last year (2025) May, after new SEC leadership appointed by the Trump administration took a more lenient approach toward crypto, Ripple and the SEC ultimately reached a settlement, ending a legal battle that had lasted more than four years.
Garlinghouse said in his speech that looking back on the decision at the time, he was glad to have chosen to fight—if the company had chosen to shut down, it would not be where it is today.
FAQ
Why did Garlinghouse consider shutting down Ripple in 2020?
Based on Garlinghouse’s remarks at the University of Kansas speech, he believed that facing a government agency with “unlimited power and resources” (the SEC), shutting down after distributing the XRP the company held 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 new SEC leadership took office under the Trump administration, Ripple and the SEC reached a settlement, ending a four-year lawsuit. During the lawsuit, Garlinghouse estimated that Ripple spent about $150 million.
What is the significance of the ruling that Ripple lawsuit XRP is not a security for the crypto industry?
According to reports, Judge Torres’s ruling established a precedent that XRP itself (that is, the circulation of tokens 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 court rulings.
