- Ripple executives considered shutting down the company after lawyers reportedly advised leadership the SEC lawsuit made the business unsavable and unwinnable.
- David Schwartz said executives faced pressure to settle quickly, while explaining why personal charges targeted Ripple’s top leadership team.
- Schwartz also addressed industry conspiracy theories, stressing his suspicions lack evidence while reaffirming Ripple ultimately chose to fight the lawsuit.
Ripple executives seriously considered shutting down the company after lawyers warned that its legal battle with the U.S. Securities and Exchange Commission had little chance of success. According to Ripple Chief Technology Officer Emeritus David Schwartz, the legal advice went beyond preparing a defense. He said attorneys believed the company was “unsavable” and encouraged its leaders to negotiate a deal instead.
Ripple Chief Executive Brad Garlinghouse recently shared how severe the situation became during a discussion at the University of Kansas School of Business. He described the SEC lawsuit as the most difficult challenge of his career and admitted the company’s future was uncertain from the outset.
Garlinghouse explained that he and Ripple co-founder Chris Larsen openly discussed whether shutting down the business would be the better option. Instead of pursuing a lengthy legal fight, they considered dissolving the company and distributing XRP holdings to shareholders on a pro rata basis.
He acknowledged that ending the company would have been the easier decision. However, he believed it would not have been the right one, prompting Ripple’s leadership to continue fighting the case despite overwhelming uncertainty.
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Schwartz details legal advice and personal pressure
According to Schwartz, Ripple’s internal discussions reflected the legal advice executives received during the lawsuit’s early stages. He said lawyers told Garlinghouse and Larsen that the company could not be saved and recommended reaching a settlement that would protect them personally. Schwartz also addressed the SEC’s decision to sue Garlinghouse and Larsen individually. According to him, naming both executives in the lawsuit appeared designed to pressure Ripple’s leadership into abandoning its defense and accepting a quick resolution.
His comments came in response to social media users who questioned whether a company valued in the billions could have genuinely considered shutting down. Schwartz insisted the legal guidance executives received explains why that possibility became a serious option. The conversation later shifted to speculation surrounding the broader cryptocurrency industry. According to Schwartz, he suspects competing crypto projects may have influenced the environment surrounding Ripple’s legal challenges. However, he repeatedly clarified that he has no evidence supporting that view.
Schwartz made the same distinction when discussing the long-running “ETHGate” theory. He stressed that his comments reflected personal intuition rather than facts and acknowledged that others may reasonably disagree.
Conclusion
Garlinghouse’s account, together with Schwartz’s explanation, offers a clearer picture of Ripple’s most difficult period. The remarks show that the company’s leadership faced intense legal pressure before deciding to challenge the SEC instead of closing the business.
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