The SEC Was Once Very Worried About What Would Happen to XRP If Ripple 'Disappeared'

According to a fresh batch of files obtained through a Freedom of Information Act (FOIA) request by Coinbase, SEC officials were actively debating the stability and security classification of various crypto assets back in 2021.

The U.S. Securities and Exchange Commission (SEC) officials were deeply worried about the future of crypto asset XRP in case the company "walked away" or "disappeared," according to newly released documents obtained through a Freedom of Information Act (FOIA) request by Coinbase.

The stability and security class of various crypto assets were actively discussed by SEC officials in 2021, and XRP was very much on their radar, the documents show.

In one internal email, SEC officials questioned what might happen if Ripple, the company behind XRP, were suddenly to "walk away" or "disappear," The Block reports.

The agency appeared concerned about what risks could surface for the XRP blockchain in such a scenario.

"If they walked away or disappeared, wouldn't there be issues with the stability and security class of the asset? Or is that a concern only for a centralized company and not for the underlying asset class itself?" one email reads.

At the time, the SEC had already kicked off a major lawsuit against Ripple, accusing it of operating illegally by selling XRP as an unregistered security.

While Ripple has since emerged victorious from that battle — even winning back some of the penalties it had previously paid — these newly uncovered emails show just how uncertain the regulators were about the decentralization and resilience of the XRP network itself.

The revelations come amid a broader series of disclosures this week from Coinbase, which published dozens of SEC communications related to crypto oversight as part of its own ongoing legal standoff with the agency.

This isn't the first time SEC deliberations on crypto assets have made headlines. The same document dump also revealed how, in 2023, the New York State Attorney General had formally asked the SEC to declare Ethereum's Ether (ETH) a security — a request that was ultimately ignored.