The Ripple and SEC Case Has a Shocking Turn

In another development of the years-long lawsuit between the SEC and Ripple, Judge Analisa Torres rejected the joint motion for a ruling on their settlement, attorney James Filan announced on X on May 15.

Judge Torres of the U.S. District Court for the Southern District of New York ruled that the cancellation of the final judgment was "procedurally improper" because the parties did not file the proper motion. As previously reported, Ripple - the blockchain and payment company - and the Securities and Exchange Commission (SEC) filed a joint resolution on May 8. The petition requests Judge Torres to issue a guiding ruling to overturn the order in the judgment dated August 7, 2024, prohibiting Ripple from "offering and selling unregistered securities." The petition also requests the court to reduce the civil penalty against Ripple from $125 million to $25 million. The court has now ruled that neither party can meet the burden that the court must overcome to "lift the injunction" and "substantially reduce" the penalty by classifying their actions as an "approval of resolution." The court also emphasized that such a request is in accordance with the Federal Rules of Civil Procedure. "The exemption from the ruling can only be granted "when there is evidence of exceptional circumstances," Judge Torres wrote. "If jurisdiction is restored to this Court, the Court will dismiss the parties' motion for being procedurally inappropriate." The federal securities regulator sued Ripple in December 2020, alleging that the company engaged in the sale of unregistered XRP token securities worth $1.3 billion. In July 2023, the issue took a turn when Judge Torres issued a landmark ruling that, while the sale of tokens to institutional investors violated securities laws, the sale to retail investors on public exchanges did not constitute a violation. After the latest ruling, the XRP price is down 3% and trading at $2.44 at the time of writing.