Ripple Considered Shutting Down Over SEC Lawsuit — Can Its Legal Victories Send XRP Price to $5?
Share
Key Takeaways
Ripple spent $150 million fighting the SEC; dissolution would have saved the legal bill.
Seven US spot XRP ETFs launched in 2025, pulling in $1.29 billion in net inflows.
CLARITY Act passage is the single remaining catalyst that most analysts tie to $5.
Brad Garlinghouse disclosed at a University of Kansas School of Business talk this week that he and Ripple co-founder Chris Larsen seriously considered dissolving the company and distributing its XRP holdings to shareholders on a pro rata basis after the Securities and Exchange Commission (SEC) filed suit in December 2020.
The rationale was pragmatic rather than defeatist: the SEC came with what Garlinghouse described as infinite power and resources, and walking away would have been the path of least resistance.
Try Our Recommended Crypto Exchanges
Sponsored
Disclosure
We sometimes use affiliate links in our content, when clicking on those we might receive a commission at no extra cost to you. By using this website you agree to our terms and conditions and privacy policy.
Ripple CEO Says Company Considered Shutting Down After 2020 SEC Lawsuit
Ripple CEO Brad Garlinghouse said the company seriously considered shutting down after the U.S. SEC sued it in 2020. He said Ripple could have distributed its XRP holdings to shareholders and told the SEC it… pic.twitter.com/8xuSRIwdyI
Ripple CTO Emeritus David Schwartz clarified on social media that his own comments had been taken out of context in secondary coverage, confirming that the dissolution was a scenario considered and rejected rather than a plan that came close to execution.
The case concluded on August 22, 2025, when the Second Circuit closed the file after both sides dropped their remaining appeals. Ripple paid a reduced civil penalty of $125 million.
Judge Analisa Torres’s 2023 ruling, which found that XRP sold on public exchanges did not constitute a securities transaction, remained intact as the defining legal outcome. XRP’s market cap rose by more than $30 billion in the months following that resolution.
Where XRP Sits Today and Why the Gap Between Legal Victory and Price Performance Is So Wide
XRP trades at $1.08 at the time of writing, down approximately 70% from its July 2025 peak of $3.66 and down from highs near $3.40 in January 2026. The legal case is closed, and the regulatory uncertainty that suppressed XRP for five years has been formally resolved.
Seven US spot XRP ETFs have launched since November 2025, pulling in over $1.29 billion in cumulative net inflows, with Goldman Sachs disclosing a $153.8 million spot XRP ETF position in its Q4 2025 13F filing.
Yet the price continues to underperform both the legal narrative and the ETF adoption curve. Ripple’s US business effectively stagnated for five years during the litigation.
Competitors accumulated institutional partnerships and developer ecosystems during the same period. XRP dropped more than 55% from its post-settlement peak even as Ripple secured its European MiCA license and institutional partnerships continued to expand.
Digital assets posted a third consecutive quarter of losses in Q2 2026, the longest losing streak since the 2022 bear market, and XRP has moved with the broader market rather than independently.
$5 Is a Conditional Call, Not a Base Case
Expert price forecasts for 2026 range from $2.80 to $6.53. The spread reflects two genuinely different futures rather than analytical disagreement.
In the scenario where the CLARITY Act passes before the August recess, XRP receives permanent federal classification as a digital commodity, removing any residual risk of future SEC challenge regardless of leadership changes and giving institutional allocators the regulatory certainty required to increase position sizes meaningfully.
In that scenario, analysts converge around $5 or above. Without the CLARITY Act, most forecasts cap near $2.80.
Three additional catalysts sit beneath the CLARITY Act in the XRP bull case:
The second is tokenized assets: Ripple’s custody and payment infrastructure has over $3.5 billion in tokenized real-world assets built on XRPL.
The third is the Polymarket odds, currently pricing CLARITY Act passage this year at 43%, down from 74% a month ago. That decline captures the market’s assessment of XRP’s remaining upside catalyst in a single number.
Ali Martinez noted that onchain whale activity on the XRP Ledger has weakened sharply. According to his data, transactions worth more than $1 million fell from 70 over the past week to just two in a single day, suggesting that large holders have significantly reduced their activity and that institutional-sized participation has cooled.
Separately, market analyst Damian Chmiel argued that XRP’s technical structure has turned bearish after closing June below $1.26 for the first time in more than three years and breaking its 50-month EMA, a level that had held since 2023.
XRP closed June below $1.26 for the first time in over 3 years.
A 22% monthly candle and a break of the 50-month EMA that had held since 2023. My chart says $1.00 parity is the last line before a structural leg down.
He identified $1.00 as the key support level, warning that a sustained break below parity could open downside targets at $0.67, $0.47, and potentially $0.29.
Chmiel attributed June’s weakness largely to broader market conditions, including Bitcoin’s decline below $59,000, Strategy’s Bitcoin sale, and delays to the CLARITY Act, while maintaining that XRP’s outlook remains bearish unless it reclaims $1.26 on a monthly closing basis.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.
Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.
