Judge Rejects Ripple-SEC Settlement Bid, Ends Penalty Talks

Judge Analisa Torres’s decision to reject the joint motion from Ripple and the SEC has sparked a flurry of interpretations and reactions within the crypto community. Crypto analyst CasiTrades suggested that the decision was merely a procedural delay, with no legal changes resulting from the ruling. She posited that Judge Torres refused to weigh in on penalties, opting to wait until the appeal’s conclusion.

Attorney Bill Morgan swiftly responded to this interpretation, clarifying that the ruling was not just a routine delay or a matter of timing. Morgan reminded the community that Judge Torres had already ruled on penalties in her earlier final judgment from August 2024. He explained that the court’s decision was a firm rejection of the proposed settlement terms designed to reduce Ripple’s fine and remove the injunction.

Morgan’s clarification shifts the narrative away from the idea that the settlement process remains open. He explained that the settlement effort involving renegotiating the $125 million penalty to $50 million and removing the injunction is now closed at the district court level. The court’s message was clear: unless Ripple and the SEC pursue further appeals or withdraw them entirely, the judgment stands. Morgan’s view highlights that this ruling formally ends the current attempt at resolving those penalty terms outside of the appellate process.

While CasiTrades pointed to the fact that XRP’s legal status remains unchanged and that no new penalties were introduced, Morgan argued that this misses the core issue. The ruling was not about deferring penalties but about refusing to modify them. Judge Torres made it clear in her ruling that the court would not alter a final judgment simply because both parties requested it, and they did not provide the exceptional circumstances required for such a ruling. Morgan emphasized that her decision was not procedural but final regarding the proposed changes to penalties and injunctions.

Judge Torres’ rejection of the joint motion came as a shock to many market participants, as experts had expressed confidence that she would grant the motion. Ripple and the SEC now have two paths forward. They can proceed with their appeals to challenge the parts of the judgment they dispute, or they can drop the appeals and accept the court’s existing ruling. There is no open-ended settlement discussion left on penalties or injunctions within the district court.