Key Takeaways:
- Judge Torres rejected Ripple and the SEC’s joint bid to dissolve the XRP sales injunction.
- The court ruled that their settlement request failed to meet procedural requirements under Rule 60.
- Ripple and the SEC are still aligned to resolve the case through a revised joint motion.
In a dramatic development in the long-running SEC vs. Ripple lawsuit, Judge Analisa Torres denied a joint motion by Ripple Labs and the Securities and Exchange Commission seeking a path to settlement.
The motion sought to lift the injunction in place that prohibited institutional XRP sales by Ripple and reduce the civil fine from $125 million to $50 million. The judge, however, did not grant the request, deeming it “procedurally improper.”
The crux of the matter is that of the procedural mechanism utilized. Parties had invoked the provision of Federal Rule of Civil Procedure 62.1, by means of which a district court is permitted to make a non-binding indicative ruling in cases in which its jurisdiction is restricted on account of an active appeal.
Judge Torres ruled that even assuming jurisdiction was revived, she would have rejected the motion, noting that the parties had not achieved the required legal burden for this relief.
Legal Oversight in Motion Draws Scrutiny
The motion, submitted on May 8, 2025, was preceded by a settlement agreement on April 23 being signed by Ripple’s lawyers and subsequently sanctioned by the SEC. Both had sought the approval of their agreement in accordance with the SEC v. Citigroup Global Markets Inc. standard, in which review of consent agreements is permitted.
Based on precedent in the law that is quoted by the judge, this kind of relief is awarded only in “exceptional circumstances.” The motion, however, did not cite Rule 60 at all. Instead, Ripple and the SEC presented the proposal in the form of a “settlement,” missing the proper procedural avenue by mistake. That mistake was fatal.
Attorney Bill Morgan clarified that the process of settlement was in motion but went off course on the fourth step, when the court dismissed their indicative ruling on account of a procedural flaw. The court specified that should they desire to proceed, the parties need to re-file according to the proper rule.
SEC and Ripple Still on the Same Page
In spite of the procedural hiccup, Ripple’s Chief Legal Officer, Stuart Alderoty, assured that everything remains the same with regard to the parties’ mutual intent for settlement. He stressed that the court’s decision was for how they should be submitting, but not the substance of their submission.
Ripple and the SEC are in it together in their quest for a resolution of the case. A re-drafted joint motion, properly supported by Rule 60, should be next. Upon being granted, it would enable the parties to go ahead with a lowered penalty and revoke the ban on sales, the last steps toward an end for this high-profile case.
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