- Ripple and SEC settlement delayed after a procedural error by both parties.
- Court rejects motion filed under wrong rule, forcing Ripple to refile.
- Settlement still intact, but further delays possible due to procedural issues.
Ripple’s settlement with the U.S. Securities and Exchange Commission (SEC) has encountered a major obstacle. The settlement process has been delayed by a procedural error by the two parties. Although an agreement was reached in April, the settlement has been stalled after the court rejected a joint motion filed by both parties.
The parties had reached an agreement that the SEC would reduce Ripple’s civil penalty from $125 million to $50 million. Moreover, the SEC agreed to lift an injunction that prevented Ripple to sell unregistered securities to institutional investors. They requested the court to halt the appeal process and approve the settlement terms. However, the motion was filed under Rule 62.1 which deals with appeals, instead of the correct Rule 60. As a result, the court denied the requested relief.
Judge Analisa Torres of the Southern District of New York ruled that the motion was improperly filed and rejected it. The motion was supposed to be filed under rule 60, which allows parties to request relief from a final judgment. The parties filed the motion under the incorrect rule which led to the setback. Legal experts believe that the misfiled motion could further affect the settlement of the case.
Ripple and SEC Work to Correct Procedural Error
Ripple and SEC must now file a corrected motion under Rule 60. Stuart Alderoty, Ripple Chief Legal Officer, revealed that both parties will correct the mistake and refile the motion. The company has however expressed confidence that the settlement agreement remains intact and that they will continue to cooperate with the SEC.
Rejection Causes Delays
The procedural error has raised concerns about the settlement of the case. Bill Morgan, a legal expert, cautions that the delay may require Ripple and the SEC to revise some of the terms in the settlement. If the case changes from Rule 62.1 to Rule 60, the SEC commissioners may have to approve the settlement again which could cause further delays.
This development has added to the uncertainty around the Ripple-SEC case. A fast resolution of the case is important to establish guidelines for digital assets in the U.S. The crypto community is worried that the settlement could run into more issues.
Ripple and the SEC are committed to secure approval for the settlement despite the legal setback.
The cryptocurrency community continues to monitor all the developments in the case. The outcome of this case could affect the cryptocurrency regulation in the U.S in future.