Judge Analisa Torres rejects Ripple-SEC settlement – waiver of the settlement

U.S. District Judge Analisa Torres has rejected the joint attempt by Ripple and the SEC to revise key aspects of a ruling in an order dated May 15. This step represents a significant setback for both parties, who had recently reached an agreement to settle their legal dispute under new terms. Particularly notable is that the original filing from May 8 pursued two main objectives: the lifting of the indefinite market restriction on institutional XRP sales and a reduction of the imposed fine from $125 million to $50 million.

The Regulatory Shift Under New SEC Leadership

The settlement agreement was directly attributable to the SEC’s changed stance following Gary Gensler’s departure as chair. The newly composed leadership signals a markedly more accommodating position toward the cryptocurrency industry. A core element of this realignment is the attempt to swiftly conclude several prominent enforcement actions, including the Ripple case.

The Core Issue: Formal Errors in the Filing Process

Despite the support from both parties, Judge Analisa Torres made a surprising decision: she rejected the motion on formal grounds. According to her written justification, the lawyers made a significant error – they filed the motion under the wrong procedural rule. While the parties formulated their request as a settlement motion, they did not meet the rigorous legal requirements necessary to modify a final judgment.

The central legal hurdle concerned Rule 60 of the Federal Rules of Civil Procedure. This provision regulates the conditions under which a previously issued judgment may be vacated or altered – and only in rare and extraordinary cases. Judge Torres made it clear that the petitioners had not overcome this high hurdle. She also explicitly stated that she would deny the motion even if her jurisdiction were restored – as the case is currently in the appeals phase.

Implications for the Market Restriction and the Fine

The implications are significant: the permanent injunction that prohibits Ripple from selling XRP to institutional buyers remains in effect. Concurrently, the original fine of $125 million retains its full validity. Both measures were at the center of the failed settlement.

Statements from the Legal Industry

Following the announcement of the decision, Stuart Alderoty, Chief Legal Officer of Ripple, commented on the significance of the ruling. Other legal experts analyzed how Judge Torres’s decision could influence the further course of the proceedings in the appeals court and what strategies Ripple might pursue in the future to improve its position.