The joint settlement agreement between the SEC and Ripple in the XRP case has been blocked by a federal judge, intensifying the ongoing legal conflict and disrupting momentum throughout the cryptocurrency sector.
Ripple-SEC Agreement Stalled After Judge Denies Motion to Amend Final Ruling
A joint motion submitted by the U.S. Securities and Exchange Commission (SEC) and Ripple Labs in the XRP case was denied by Judge Analisa Torres of the U.S. District Court for the Southern District of New York.
In her decision dated May 15, the request to remove an injunction and lower a $125 million civil penalty was rejected, with the judge ruling that the proposed agreement failed to satisfy the legal criteria required for altering a final judgment.
Court approval had been sought by the SEC and Ripple to annul an injunction that barred Ripple from committing securities violations and to reduce the civil penalty to $50 million as part of a negotiated agreement during the pendency of their appeals.
However, Judge Torres deemed the motion procedurally improper, noting that it should have been submitted under Rule 60—a rule governing motions for relief from a final judgment that requires proof of “exceptional circumstances.” Attorney James Filan, responding to the decision, shared commentary on the social media platform X:
Judge Torres has denied the parties’ motion for an indicative ruling. ‘If jurisdiction were restored to this Court, the Court would deny the parties’ motion as procedurally improper.’
The case originated from a lawsuit filed in 2020 by the SEC, which accused Ripple Labs of illegally offering and selling XRP as unregistered securities, thereby breaching the Securities Act of 1933.
After extended litigation, a partial summary judgment issued in 2023 ruled in Ripple’s favor, determining that its programmatic sales and certain other XRP distributions did not constitute securities transactions. Nonetheless, a final judgment in 2024 imposed a $125 million civil penalty on Ripple, with its enforcement paused pending appeal.
On May 8, 2025, a settlement agreement was reached between Ripple and the SEC, proposing to lift the injunction and reduce the penalty to $50 million—a 60% decrease—subject to judicial approval.
