Garlinghouse’s comment is pretty on point: once the government machinery starts running, small companies really can’t afford to keep up. Ripple didn’t choose to lie down—by pushing through, it also reached a settlement, which sets an example for the industry. But for teams without resources, they might really have to shut down. This case from start to finish keeps reminding everyone: compliance costs are the biggest hidden tax for Web3 startups.

Ripple CEO Brad Garlinghouse said at an event at the University of Kansas School of Business that after the U.S. Securities and Exchange Commission (SEC) sued Ripple in 2020, the company had seriously considered shutting down. Garlinghouse said the government has nearly unlimited resources, making closure a potentially easier option; Ripple could have distributed its held XRP to shareholders pro rata and told the SEC the company no longer held XRP. But he said that would have led to the unemployment of hundreds of people, so Ripple ultimately chose to continue fighting the lawsuit. The SEC previously accused Ripple of conducting an unregistered securities offering by selling XRP, and the two sides later reached a settlement. (CoinGape)