Ripple CEO Brad Garlinghouse announced that the company seriously considered the option of terminating its operations after the lawsuit filed by the US Securities and Exchange Commission in December 2020. The company is debating whether to continue because of the cost and difficulty of a legal fight against the federal regulator, Garlinghouse said in a speech at the KU School of Business.
Closing option came to the fore after the lawsuit
According to Garlinghouse, Ripple considered the possibility of terminating its operations by distributing its XRP assets to shareholders on a pro rata basis and informing the SEC that it no longer holds XRP. Stating that this method could close the dispute in a shorter time, Garlinghouse also emphasized that such a decision would cause hundreds of employees to lose their jobs.
Recalling the period in December 2020, Brad Garlinghouse explained that immediately after the SEC’s case, exchanges began to quickly delist XRP, and there was a strong perception in the market that Ripple was finished.
However, instead of backing down, Ripple chose to dispute the SEC’s claims. Garlinghouse stated that the regulator has very broad powers and resources, but the worst outcome for the company would be to lock the door. The SEC claimed that Ripple was selling unregistered securities through the XRP token.
The case has become a precedent in the crypto industry
The process has become one of the most closely watched sanctions cases in the cryptocurrency market. The SEC sued not only Ripple, but also Garlinghouse and Ripple co-founder Chris Larsen individually. In 2023, Judge Analisa Torres ruled that some transactions of XRP did not qualify as securities transactions. This provision was considered an important turning point for the digital asset market.
Mini dictionary: MiCA is the short name for the comprehensive framework prepared by the European Union to regulate crypto asset markets. This regulation aims to bring the licensing and operating rules of crypto companies to common ground throughout the union.
Ripple is known as a technology company that develops blockchain-based payment solutions. The litigation has brought into question not only the future of the company, but also how to establish a legal distinction between digital assets and how these assets are bought and sold. Legal experts see this file as one of the important examples used in crypto asset regulations.
A recovery was observed in US and European activities
After litigation spanning many years, Ripple continued its work in payment systems and blockchain development while expanding its regulatory relationships. Some representatives in the XRP community argue that the company is showing signs of recovery thanks to its increasing commercial activity in the United States, the licenses it has obtained and the partnerships it has established in different regions. On the European side, MiCA-compliant steps are also followed within this framework.
Garlinghouse emphasized that it was difficult to resist the litigation process, but closing the company would have a more severe consequence for Ripple.
Garlinghouse’s latest statements revealed new details about one of the most challenging periods in Ripple’s history. The process stood out as one of the examples that clearly demonstrates the impact of regulatory steps on company decisions, employment and the investment environment in the digital asset sector.
