Ripple was sued by the SEC in 2020 for selling XRP as an unregistered security, an action that almost exposed the company to dissolution. Chief Executive Officer Ripple Brad Garlinghouse revealed that they had seriously considered the closure of the company in order to avoid a long struggle with federal institutions with “infinite powers and resources”.
Ultimately, Ripple spent about $150 million on legal fees, and Judge Analisa Torres ruled that XRP was not a security in itself and had become an important legal milestone in Ripple and the wider encryption market.
The settlement in May, following a more liberal attitude by the new SEC leadership under the Trump administration, demonstrated that the regulatory environment was essential for the survival of the encryption enterprise.