Judge Analisa Torres denies joint petition from Ripple and SEC

Judge Analisa Torres has rejected a settlement proposal jointly submitted by the cryptocurrency company Ripple and the U.S. Securities and Exchange Commission (SEC). The federal judge explained her decision citing serious procedural errors, signaling a new direction in one of the most high-profile legal cases in the crypto industry. The rejection on May 15th marks a setback for both parties, who had reached an agreement earlier this month.

Formal Errors Lead to Dismissal of the Motion

According to Torres, the main issue lies in the incorrect legal basis of the request. Ripple and the SEC had framed their motion as an application for approval of a settlement but failed to meet the necessary requirements under Rule 60 of the Federal Rules of Civil Procedure. This rule governs the procedures for vacating or modifying final judgments and requires strict conditions that can only be satisfied in rare and extraordinary cases.

Torres made it clear that the parties had not demonstrated the existence of extraordinary circumstances. The original motion from May 8th sought two main changes: lifting the injunction that prohibits Ripple from institutional XRP sales and reducing the fine from $125 million to $50 million. For Torres, these economic reasons alone were insufficient to meet the procedural prerequisites.

Shift in SEC Policy Under New Leadership

The background of the motion was rooted in a fundamental realignment of the SEC following the resignation of Chairman Gary Gensler. The newly appointed leadership signaled a more conciliatory approach toward the crypto industry and aimed to resolve several high-profile enforcement cases, including the Ripple case. This policy shift suggested that the aggressive regulation of previous years might give way to a more pragmatic approach.

The joint filing was intended as a signal that both sides—previous adversaries—had reached a common understanding. However, Judge Torres thwarted these plans through her strict interpretation of procedural rules, emphasizing that even agreements between parties do not automatically allow for changes to final judgments.

Implications for Ripple and Crypto Regulation

Analisa Torres’s decision has several immediate consequences. First, the injunction against institutional sales remains in effect. Second, the $125 million fine cannot be reduced to $50 million—at least not through this procedural route. The case is currently in the appeals process, which would limit Torres’s jurisdiction over this matter anyway.

For the crypto industry, the takeaway is clear: regardless of government changes and new SEC leadership, courts remain bound by procedural rules. Attempts to modify judgments post hoc through cooperation between regulators and companies require solid legal grounds. Stuart Alderoty, Ripple’s Chief Legal Officer, announced that they will evaluate the next steps, while it remains uncertain whether Ripple will pursue other legal avenues to challenge the sanctions.