- Judge Torres rejected Ripple and the SEC’s joint motion to vacate the XRP injunction and reduce the penalty.
- The court said the settlement cannot override its final ruling and advised both parties to pursue an appeal if they want relief.
- Ripple may now be forced to continue the appeals process, which could further delay the resolution of the case.
U.S. District Judge Analisa Torres has denied the joint motion filed by Ripple Labs and the Securities and Exchange Commission (SEC) seeking an indicative ruling to vacate the existing injunction and reduce Ripple’s penalty. The decision reaffirms the court’s August 2024 judgment that imposed a $125 million civil penalty and barred Ripple from selling XRP to institutional investors in the U.S.
In her latest order, Judge Torres emphasized that the proposed settlement terms, including vacating the injunction, do not override the final public judgment. She dismissed the precedents cited by both parties, noting that none involved civil penalties or injunctions like those issued in the Ripple case.
“The Court is not persuaded,” Torres wrote, stating that the cited enforcement cases were dismissed before any finding of securities law violations.
Judge Points to Appeal as Only Valid Option
Torres underlined that the legal path forward lies in the existing appeal filed at the Second Circuit. She added that Ripple and the SEC are free to withdraw their appeals if they wish to resolve the dispute amicably, but cannot compel the court to revise its binding judgment.
The judge further pointed out that the parties’ agreement conditioned the withdrawal of appeals on the dissolution of the injunction. “Dissolution of the injunction as a precondition to the termination of the parties’ appeals is only necessary because the SEC and Ripple made it so,” she noted.
Ripple had hoped that the SEC’s recent shift in enforcement direction—dropping lawsuits against companies like Coinbase and Kraken after former SEC Chair Gary Gensler’s departure would strengthen its case. However, Torres dismissed that argument, saying those cases lacked any final judgment or penalties and were irrelevant to Ripple’s situation.
Ripple May Be Forced to Resume Appeals Battle
The appeal now shifts focus back to the appeals process. Ripple and the SEC have already appealed and cross-appealed in October 2024 and announced a settlement plan earlier this year. The ruling by Judge Torres has succeeded in countermanding that plan.
According to legal experts, the rejection might prolong the legal fight. Australian lawyer Bill Morgan, a close follower of the case, described the motion as “crucially important” and alluded that it may be in Ripple’s best interests now to take the penalty and injunction to end the prolonged waiting.
The injunction is still in effect, and Ripple is not allowed to sell XRP to institutions in the U.S without being registered. Although Ripple still holds the appeal option, the court has clarified that it will not overturn its decision with a compromise settlement. The price of XRP responded relatively modestly to the ruling, declining by 1.6% in the past 24 hours.
