During an interview with Ripple CEO Brad Garlinghouse said the company discussed closing after the U.S. Securities and Exchange Commission sued it in 2020.

Brad said Ripple could have divided its XRP supply among shareholders, declared that it held no tokens, and ended the dispute, but they decided not to because hundreds of employees could have lost their jobs.

Ripple instead spent four years in court and about $150 million on lawyers. Its U.S. business stalled for about five years. The SEC also targeted Brad over XRP he sold. Regulators offered to drop his case for a fine while continuing against Ripple. He refused.

Ripple CEO discusses XRP, SEC lawsuit

Brad said an XRP transaction usually settles in about four seconds and costs a fraction of one cent. Ripple sells software to banks and financial institutions, not individual users.

He compared XRP with Bitcoin. One Bitcoin transaction can cost around $10 and take about 10 minutes. XRP serves another purpose. It handles payments faster, charges less, and supports more activity. Ripple uses the open-source XRP Ledger in its products.

Asked why the SEC (specifically under Gary Gensler and Joe Biden) was angry, Brad joked, “They’re jerks.” He said the issue was applying old financial laws to new technology.

Brad entered the internet industry in 1994. He pointed to rules passed in 1996, with help from Al Gore, that gave internet companies and investors clearer legal boundaries. According to Brad, the crypto companies had been asking for similar laws since most members of the industry were ready to comply but required clear limits.

The SEC insisted that XRP was a security and not a currency or commodity. Brad noted that a security tends to give its holder rights within the business entity. XRP buyers received no Ripple shares, votes, board powers, or dividends.

Brad’s biggest SEC claim

Ripple remains private. It raised venture capital in 2012, 2015, and 2016 by selling actual equity. Brad compared that equity with owning Apple Inc. (NASDAQ: AAPL) stock.

Ripple owns substantial XRP, but Brad said it cannot command the network because the code is open source. He placed XRP closer to Bitcoin than corporate equity.

The SEC said Ripple sold unregistered securities. Brad said the matter was civil, not criminal, though the possible penalty was enormous.

In his visits to the SEC office in 2017, 2018, and 2019, Brad did not have legal representation. A Harvard Business School alumnus, Brad never treated XRP as a security but only explained the Ripple system to the SEC office personnel.

“Not once did someone say to me, Brad, we think XRP might be a security,” he said.

When the agency later sued both him and Ripple, Brad questioned whether its theory meant every XRP holder who sold tokens had also broken securities law. He said the personal charge was meant to pressure him.

Brad called the SEC’s conduct “distasteful” and “maybe unethical.” Ripple repeatedly asked for clear guidance, yet regulators gave none before suing.

Ripple won after four years, but the former SEC chair planned an appeal. Brad said Trump later appointed a new chair who adopted a different approach and engaged crypto companies directly during the final years of the fight.

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