Back
Ripple considered shutting down after SEC suit; Deaton says 75,000 holders helped

Ripple considered shutting down after SEC suit; Deaton says 75,000 holders helped

Brad Garlinghouse said Ripple weighed dissolving after the SEC’s 2020 XRP lawsuit, while lawyer John Deaton said organized XRP holders helped the company resist pressure and fight a case that ended with a mixed ruling.

XRP

Fact Check
Multiple sources independently confirm the claim. The CoinDesk article explicitly states Garlinghouse said Ripple weighed shutting down and distributing XRP to shareholders after the 2020 SEC lawsuit, chose to fight, and spent $150 million on legal defense before the case settled. Crypto Briefing corroborates the near-shutdown and settle-or-fight framing. The WuBlockchain X post relays the same account. All trace to Garlinghouse's remarks at a University of Kansas School of Business talk, making the origin a direct statement by the CEO named in the claim.
    Reference: 123
Summary

Ripple CEO Brad Garlinghouse said the company seriously considered shutting down after the U.S. SEC sued in December 2020 over more than $1.3 billion in alleged unregistered XRP sales, including discussions about distributing Ripple’s XRP holdings to shareholders and dissolving the business. Ripple instead chose to keep operating, spent about $150 million on litigation and preserved hundreds of jobs. Crypto lawyer John Deaton later said 75,000 XRP holders helped Ripple’s leadership withstand pressure to settle, after he organized token holders and joined the case as an amicus to argue that secondary-market XRP transactions should not automatically be treated like Ripple’s institutional sales. The litigation ended with a split outcome: Judge Analisa Torres ruled in 2023 that Ripple’s programmatic XRP sales on public exchanges were not securities transactions under the facts presented, while some institutional sales violated securities law. The SEC later dropped its remaining claims against Garlinghouse and Chris Larsen, but the court imposed a $125 million civil penalty and an injunction on Ripple, and after both sides dropped their appeals in August 2025, the final judgment remained in force.

Terms & Concepts
  • programmatic XRP sales: XRP sales made on public exchanges, where buyers typically do not know whether Ripple is the seller.
  • amicus: A non-party allowed to assist a court by presenting arguments or information.
  • secondary-market transactions: Trades between investors rather than direct sales by the issuer.