New Delhi, July 12 -- SAN FRANCISCO - Brad Garlinghouse had a choice in late 2020. The Securities and Exchange Commission had just sued Ripple for allegedly conducting an unregistered securities offering worth $1.3 billion, and the company's chief executive and co-founder Chris Larsen were calculating whether it was worth fighting a federal agency with, as Garlinghouse put it this week, "infinite power and resources."

The conclusion they nearly reached was to shut down entirely.

Garlinghouse disclosed the details Wednesday at the University of Kansas School of Business, describing a moment that had remained private since the lawsuit was filed in December 2020. He and Larsen seriously considered dissolving Ripple and distributing its XRP...