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 May 15 decision, the judge rejected the request to remove an injunction and reduce a $125 million civil penalty, ruling that the proposed agreement did not meet the legal criteria for modifying a final judgment.
The SEC and Ripple jointly sought court approval 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 their ongoing appeals.
However, Judge Torres rejected the motion as procedurally improper, stating that the parties should have filed it under Rule 60, which governs motions for relief from a final judgment and requires evidence 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, Ripple and the SEC reached a settlement agreement proposing to lift the injunction and reduce the penalty to $50 million—a 60% decrease—pending judicial approval.
