Judge Analisa Torres has rejected the joint motion by the SEC and Ripple Labs seeking approval for their proposed settlement, leaving the original XRP lawsuit ruling intact.
Key Developments in the Ripple-SEC Legal Battle
- Procedural Grounds for Rejection: Judge Torres dismissed the joint request for indicative ruling, citing "improper procedure" under Federal Rules of Civil Procedure.
- Original Ruling Remains Effective: The initial judgment—including penalties and injunctions—continues to govern the case until proper motions are filed.
- Next Steps: Both parties must either refile corrected motions or resume appellate proceedings through proper channels.
Implications for the Proposed Ripple-SEC Settlement
The May 15, 2025 ruling creates uncertainty around the previously announced settlement terms that would have:
- Reduced Ripple's civil penalty from $125M to $50M
- Lifted certain token sales restrictions
👉 Why this SEC-Ripple case matters for crypto regulation
Judge Torres emphasized that the joint request failed to meet Rule 60 standards requiring demonstration of "extraordinary circumstances" to alter final judgments. This procedural hurdle means:
- The original $125M penalty remains enforceable
- Sales restrictions stay in place
- Appeal processes may reactivate unless corrected filings are submitted
Market Reaction and Community Response
XRP prices dropped ~5% following the decision, despite a 15% monthly gain. Ripple's Chief Legal Officer Stuart Alderoty tweeted:
"Today's order doesn't change Ripple's victory on XRP's non-security status. This is about procedural dismissal of cross-appeals. We'll work with the court to revisit this."
The crypto community had viewed the proposed settlement as potentially ending the 5-year legal saga. However, Judge Torres' insistence on proper procedure extends the uncertainty.
What Comes Next?
Two potential paths forward:
- Corrected Motion Submission: SEC and Ripple refile with proper Rule 60 arguments
- Appeal Process Resumption: Litigation continues through appellate courts
Key considerations:
- How quickly parties can address procedural deficiencies
- Whether new motions might include modified settlement terms
- Impact on Ripple's US expansion under Trump-era crypto policies
FAQ: Understanding the Ripple-SEC Case Status
Q: Does this ruling affect XRP's legal status as a non-security?
A: No. Judge Torres' 2023 determination that XRP isn't a security remains unchanged.
Q: Can Ripple and SEC still settle?
A: Yes, but they must follow proper Rule 60 procedures for modifying the original judgment.
Q: What happens if they don't refile?
A: The case likely returns to appellate courts, potentially prolonging resolution by months.
Q: How does this impact XRP investors?
A: Continued uncertainty may cause price volatility, but core business operations continue.
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The Long Road Ahead
As Ripple expands under favorable US regulatory shifts, this procedural setback highlights:
- The complexity of high-stakes crypto litigation
- Importance of precise legal filings
- Market sensitivity to regulatory uncertainty
The case's resolution—whether through settlement or continued appeals—will set important precedents for how regulators approach cryptocurrency enforcement actions. With billions in market capitalization at stake, all eyes remain on this landmark proceeding.