Ripple-SEC $50M Settlement Rejected by Judge Over Legal Technicalities
A U.S. federal judge has formally rejected a proposed $50 million settlement between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), citing procedural flaws and jurisdictional overreach. The decision marks another twist in the long-running legal battle concerning unregistered XRP sales.
Judge Torres Flags Jurisdiction and Procedure Issues
In her ruling on Thursday, Judge Analisa Torres stated that the joint settlement request was filed improperly, as the case is currently under appellate review.
- She emphasized that the court lacks jurisdiction to act while the case is on appeal, making any such filing premature.
- Even if jurisdiction were not in question, the motion failed to meet legal standards for modifying an existing final judgment.
Judge Torres called the filing “procedurally improper”, underlining that both parties must follow precise legal channels when requesting dismissal or settlement amendments.
- Procedural irregularities can undermine the finality and integrity of court rulings, especially during active appellate proceedings.
Background: Ripple vs. SEC
The SEC filed its lawsuit against Ripple in December 2020, alleging the company raised $1.3 billion through unregistered securities offerings via XRP.
- The central claim was that XRP should be treated as a security, thus requiring regulatory compliance under U.S. law.
- Ripple has long disputed this classification, asserting XRP is a digital asset, not a traditional security.
Several key rulings in the case over the years have partially favored Ripple, especially regarding programmatic XRP sales.
- These rulings weakened the SEC’s overall argument but didn’t end the legal process, prompting cross-appeals from both parties.
Ripple Maintains Legal Momentum Despite Setback
In response to the judge’s order, Stuart Alderoty, Ripple’s Chief Legal Officer, clarified that the ruling was strictly about procedure, not substance.
- Posting on X, he stated, “Nothing in today’s order changed Ripple’s wins.”
- He also noted that the issue relates to the dismissal of Ripple’s cross-appeal, not the broader legal conclusions.
Alderoty added that both Ripple and the SEC remain aligned in their intent to resolve the matter.
- He confirmed that they will revisit the issue together, working to properly refile the request in accordance with court protocol.
What Comes Next for Ripple and XRP
The rejection does not affect Ripple’s previous legal victories, but it does delay the potential resolution of the case.
- A final settlement could offer regulatory clarity for XRP and potentially impact other crypto-related cases.
With both parties signaling cooperation, the focus now shifts to correcting procedural missteps and re-engaging with the court at an appropriate time.
- A successful refiling could still lead to resolution, but must adhere to judicial norms and respect appellate timelines.
As the case remains under appeal, the broader crypto industry continues to watch closely, recognizing its implications for token classification, regulatory oversight, and future enforcement actions.
