Ripple CEO reveals company nearly shut down during SEC lawsuit as XRP community marks three-year anniversary of partial legal victory

Jul 12, 2026

Ripple CEO Brad Garlinghouse revealed that the company seriously considered shutting down and distributing its XRP holdings to shareholders after the SEC filed its lawsuit in December 2020. Rejecting advice from lawyers who deemed the firm unsalvageable, Ripple spent $150 million over four years to fight the case. Although Ripple secured a partial legal victory in 2023 and settled for $125 million in 2025, XRP's price remains down 70% from its 2025 peak, trading near $1.08 despite drawing $1.29 billion in spot ETF inflows.

Ripple SEC lawsuit dissolution

▪Ripple CEO Brad Garlinghouse and co-founder Chris Larsen seriously considered dissolving Ripple and distributing its XRP holdings to shareholders on a pro-rata basis after the SEC filed suit in December 2020.
▪Ripple executives rejected advice from their lawyers who urged immediate settlement and declared the company unsalvageable, choosing instead to spend approximately $150 million on legal fees over four years.
▪The SEC offered Brad Garlinghouse a personal settlement to drop the case against him if he paid a fine while continuing the lawsuit against Ripple, which Garlinghouse rejected.
▪Ripple CTO Emeritus David Schwartz clarified that dissolving Ripple was a scenario considered and rejected rather than a plan that came close to execution.

XRP legal victory outcome

▪Judge Analisa Torres ruled in 2023 that Ripple's programmatic sales of XRP on public exchanges did not constitute securities transactions, while direct institutional sales of $728.9 million did violate registration rules.
▪The SEC lawsuit against Ripple formally concluded in August 2025 when both sides dropped their remaining appeals and Ripple paid a reduced civil penalty of $125.04 million.

XRP price decline underperformance

▪XRP traded at $1.08 in July 2026, representing a decline of approximately 70% from its July 2025 peak of $3.66.
▪XRP's price underperformed its legal resolution and ETF adoption curves as Ripple's United States business effectively stagnated for five years during the litigation while competitors accumulated partnerships.

XRP ETF institutional adoption

▪Goldman Sachs disclosed a $153.8 million spot XRP ETF position in its Q4 2025 13F filing.
▪Seven United States spot XRP ETFs launched since November 2025, pulling in over $1.29 billion in cumulative net inflows.

CLARITY Act passage outlook

▪Passage of the CLARITY Act before the August recess would grant XRP permanent federal classification as a digital commodity, which analysts project could drive the price to $5 or above.
▪Polymarket odds priced the probability of the CLARITY Act being signed into law in 2026 at 43%, down from 74% a month prior.

XRP technical bearish signals

▪XRP closed June 2026 below $1.26 for the first time in more than three years, breaking its 50-month exponential moving average.
▪Market analyst Damian Chmiel identified $1.00 as a key support level for XRP, warning that a sustained break below parity could open downside targets at $0.67, $0.47, and $0.29.