Ripple Labs and the U.S. Securities and Exchange Commission (SEC) are heading back to court after Judge Analisa Torres rejected a joint request to approve a $50 million settlement deal. The ruling has thrown another twist in the high-stakes legal battle over XRP’s regulatory status.
Why Was the Settlement Denied?
The court denied the request because Ripple and the SEC failed to follow the proper legal procedure. On May 8, 2025, both parties asked the court to lift a previous order prohibiting Ripple from selling XRP unlawfully and to reduce Ripple’s penalty from $125 million to $50 million. However, Judge Torres stated that the request did not meet the legal standards required for such a motion, specifically pointing to a failure to adhere to Rule 60, which governs how final court decisions can be modified.
Also Read: Ripple Faces Legal Setback as Judge Torres Denies Indicative Ruling in XRP Lawsuit
Background of the Ripple vs. SEC Case
The legal battle began in 2020 when the SEC sued Ripple, accusing the firm of selling XRP as an unregistered security. In 2024, Ripple was ordered to pay a significant penalty, leading to ongoing appeals from both parties. Despite reaching a settlement agreement in April and May 2025, the court’s rejection has now created a procedural impasse. Legal experts suggest that Ripple and the SEC may need to resubmit their motion with the correct legal framework to proceed.
What’s Next for Ripple and the SEC?
Attorney Bill Morgan noted that the settlement plan involved pausing the appeals and seeking a court endorsement for the agreement. Ripple’s Chief Legal Officer, Stuart Alderoty, clarified that the ruling does not affect the broader win that XRP is not considered a security. He emphasized that the denial was purely procedural and that Ripple and the SEC are still aligned in their intention to resolve the matter. However, the latest setback raises questions about how the case will proceed and whether both sides will pursue a revised motion or take an alternative route.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
