Ripple Battled $150M Legal Costs — Chose Jobs Over Closure
By John Nada·Jul 12, 2026·4 min read
Ripple fought a $150M legal battle against the SEC, choosing to protect jobs over dissolving. This decision paid off as XRP wasn't deemed a security.
Ripple's legal battle with the SEC cost the company $150 million, according to CoinDesk. But the impact of their decision to fight rather than dissolve reaches further.
Brad Garlinghouse, Ripple's CEO, revealed that in 2020 he and co-founder Chris Larsen considered shuttering the company and distributing its substantial XRP holdings to shareholders in response to the SEC lawsuit. The agency alleged that Ripple had sold XRP as an unregistered security, putting the company and its executives under intense scrutiny.
Fighting the SEC, a behemoth with "infinite power and resources," as Garlinghouse described, was the harder choice. Yet, that choice preserved hundreds of jobs at Ripple — a fact Garlinghouse appreciates in hindsight. The legal tussle, which stretched over four years, concluded with Judge Analisa Torres ruling that XRP itself is not a security, a significant victory for Ripple.
Ripple's decision also came amidst a broader institutional pivot, as digital assets faced a third consecutive quarter of losses by Q2 2026. Institutional capital veered towards AI equities, with Bitcoin ETFs experiencing their largest outflow since inception.
This context underscores the stakes Ripple faced. Choosing to combat the SEC aligned more with a strategic bet on the future of crypto, even as other digital assets saw a downturn.
CoinDesk noted the settlement between Ripple and the SEC came after new leadership took a more accommodating stance towards crypto. It highlights a shift in regulatory posture — one that might not have been possible if Ripple had bowed out early.
The decision not to dissolve didn't just strengthen Ripple's resolve but also signaled to the crypto world that endurance and adaptation could pay off. It's a testament to the long game in a landscape fraught with legal and market challenges.
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Garlinghouse's reflections indicate the gravity of the decision they faced. He described the potential closure as an "easier path," one where Ripple could have handed over its XRP holdings to shareholders on a pro rata basis, effectively ending the case by ending the company. This path would have meant avoiding the arduous legal battle with the SEC, which had named both Garlinghouse and Larsen personally in its allegations.
The CEO's meetings with SEC officials between 2017 and 2019, during which no mention was made that XRP might be treated as a security, further complicated the company's stance. This lack of clear regulatory guidance contributed to Ripple's decision to fight, as Garlinghouse felt the company had been denied the clarity that would allow them to comply.
Despite the high legal costs, the outcome validated Ripple's decision. Judge Analisa Torres's ruling that XRP is not a security was not just a win for Ripple but also a clarion call for the crypto industry. It reinforced the notion that digital assets could be classified differently than traditional securities, influencing ongoing and future regulatory discussions.
The broader market environment at the time also played a role in Ripple's choices. As digital assets suffered a prolonged bear market, with a third consecutive quarter of losses by Q2 2026, the strategic decision to hold firm against the SEC gained even more significance. Institutional investors, wary of volatility in digital assets, shifted their capital towards more stable investments like AI equities, leading to significant outflows from Bitcoin ETFs.
Yet, even in this challenging market, Ripple's resolve demonstrated that there was still potential for growth and success within the crypto sector. The company's decision to fight on was not just about preserving jobs but also about maintaining its position in a rapidly evolving industry.
The eventual settlement and the change in SEC leadership to a more crypto-friendly stance marked a turning point not only for Ripple but for the entire sector. It suggested that regulatory bodies might be willing to engage more constructively with the crypto industry, paving the way for future innovations and collaborations.
Through this legal battle, Ripple cemented its reputation as a resilient player in the crypto market. The decision to stand firm against the SEC, despite the significant financial and resource challenges, has become a case study in corporate perseverance and strategic foresight. As Ripple continues to navigate the complexities of the crypto landscape, its experience serves as a guide for other companies facing similar regulatory hurdles.