Ripple and SEC Face Setback as Judge Blocks Proposed Settlement

Highlights:

• Judge Torres rejected Ripple and SEC’s motion due to improper procedure and lack of court jurisdiction.
• According to Rule 62.1, a court can give its view but cannot take direct action during an appeal.
• Ripple and SEC still plan to resolve the case through a new motion using the correct legal process.

Analisa Torres, a judge of the District Court for the Southern District of New York, denied a joint request from Ripple Labs and the U.S. Securities and Exchange Commission on May 15. The motion asked the court to lift an injunction and reduce the previous penalty from $125 million to $50 million. However, the judge ruled that the motion did not follow the correct legal procedures. She stated that the parties ought to have filed under Rule 60. That rule applies when a party seeks relief from a final court judgment and must show exceptional circumstances.

Advertisement

CRYPTO NEWS: Judge Torres rejected a motion for an indicative ruling in the SEC vs. Ripple lawsuit, and Ripple’s Chief Legal Officer stated they are collaborating with the SEC to address and reevaluate the matter jointly. pic.twitter.com/NgRetqLoUP

— Crypto News (@CryptoN3ws) May 16, 2025

The court also explained that without jurisdiction, it could not act on the motion. Both Ripple and the SEC have asked for a new court hearing. Therefore, the court case is under the jurisdiction of the Second Circuit Court of Appeals. The court can only reconsider something if the same court decides to send the case back to them. Judge Torres said that even if the court had the authority, she would still turn down the motion because it was not the right way to go about it.

The injunction means Ripple can’t disobey the rules about trading XRP in the future. The proposed settlement would have meant that the company would have agreed to a different deal and would have had to pay way less in penalties. That agreement had to be approved by the court before any changes could take place. Due to the court denying the motion, the usual order and the complete penalty still stay in effect as the appeal goes on.

Procedural Missteps Delay Settlement Despite Mutual Agreement

Ripple and the SEC decided on an agreement on May 8 to help resolve their case. They asked for a preliminary ruling to get some clarity before the final appeal decision is made. An indicative ruling is a statement explaining how the district court would likely decide if it could. According to Rule 62.1, a court can give its view but cannot take direct action during an appeal.

Attorney James Filan shared the court’s remarks online. He quoted the judge saying she would deny the motion even if jurisdiction returned. Attorney Fred Rispoli also noted the mistake. He said the motion should have been filed under Rule 60. He added that both parties must now refile using the correct process.

#XRPCommunity #SECGov v. #Ripple #XRP Judge Torres has denied the parties’ motion for an indicative ruling. “If jurisdiction were restored to this Court, the Court would deny the parties’ motion as procedurally improper.” pic.twitter.com/4s95ILvzsy

— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) May 15, 2025

Legal Outcome Unchanged as XRP Status Remains Intact

Alderoty said the ruling only concerns legal procedure and does not change Ripple’s previous victories. The ruling does not change the fact that XRP are not securities. Despite the rejection, both parties still plan to settle the case. The case began in 2020 when the SEC sued Ripple over XRP sales. Ripple received a penalty and an injunction, but the court paused the orders while both sides appealed.

Nothing in today’s order changes Ripple’s wins (i.e. XRP is not a security, etc). This is about procedural concerns with the dismissal of Ripple’s cross-appeal. Ripple and the SEC are fully in agreement to resolve this case and will revisit this issue with the Court, together. https://t.co/vBQdBD3FNe

— Stuart Alderoty (@s_alderoty) May 15, 2025

The parties may file a new motion in court soon. XRP is down 2.35% today. However, the trading volume has increased 13.06% to $5.5 billion. Meanwhile, the market cap stands at $140.96 billion.

Advertisement