Ripple Settlement Proposal Rejected by Federal Judge
Ripple Labs hit a legal roadblock Thursday when a federal judge rejected a joint proposal by Ripple and the SEC to reduce a civil penalty. The cryptocurrency firm had sought to settle for $50 million over past XRP token sales. But the court wasn’t convinced.
Judge Analisa Torres of the Southern District of New York said the proposed settlement undermined judicial authority. She emphasized that private parties cannot negotiate away a final court order.
Ripple’s Legal Battle Over XRP Continues
Ripple’s dispute with the SEC centers on the XRP token, a digital asset that has long sparked debate over its regulatory classification. In July 2023, Judge Torres ruled that Ripple’s XRP sales on public exchanges weren’t securities. However, $728 million in XRP sold to institutional investors did fall under securities laws.
Ripple and the SEC initially appealed this mixed ruling. But both sides later agreed to a $50 million fine and requested that the court vacate its earlier injunction. The judge rejected both requests.
Judge Defends Judicial Oversight in Ripple Case
In her ruling, Judge Torres was firm. She stated that no private agreement can override a court’s permanent injunction. The law must be upheld, especially when Congress is involved.
“The parties do not have the authority to agree not to be bound by a court’s final judgment,” Torres wrote. She further stated that the proposed changes lacked “exceptional circumstances” necessary to warrant altering her original decision.
Ripple Still Weighing Legal Options
Ripple’s chief legal officer, Stuart Alderoty, posted on X (formerly Twitter) that the company hasn’t yet determined its next move. The SEC declined to comment on the judge’s decision.
Ripple could still choose to appeal the court’s ruling or withdraw its current appeal and accept the original penalties. The company’s next step remains uncertain, but the legal battle is far from over.
Ripple’s XRP Sales Sparked Major SEC Scrutiny
This case has been one of the SEC’s most high-profile actions in the cryptocurrency space. Ripple’s $728 million in XRP sales to institutional investors led to the original $125 million fine. The ruling also imposed a permanent injunction to prevent further violations.
Ripple had hoped for a lighter penalty in exchange for ending the legal battle. But the judge made clear that public interest and legal standards must take precedence over negotiated convenience.
Regulatory Environment Around Ripple Is Evolving
The broader crypto regulatory landscape has shifted. Since Donald Trump’s return to the presidency, the SEC has ended lawsuits against Binance, Coinbase, and Kraken. Ripple had hoped this softer stance would apply to its case as well.
However, the court stressed that enforcement decisions are still subject to legal scrutiny — particularly when past violations involve Congressional law.
Ripple Still Holds Market Strength Despite Legal Setbacks
Despite the court ruling, Ripple’s XRP remains the fourth-largest cryptocurrency by market capitalization. It trails only Bitcoin, Ethereum, and Tether, according to CoinMarketCap.
Ripple’s market role remains significant. But legal clarity and regulatory compliance will shape how the company moves forward. For now, its legal battles continue — and the crypto world is watching closely.