Judge Rejects Ripple SEC Settlement Request

Judge Analisa Torres recently rejected a joint request from Ripple and the U.S. Securities and Exchange Commission (SEC) for an “indicative ruling” that would have facilitated settlement discussions. The denial was based on procedural grounds, as the judge deemed the request improper and outside her jurisdiction due to the case being under appeal. Torres emphasized that even if the request was within her jurisdiction, it would still be denied for not addressing Rule 60, which governs the justification for relief from final judgments.

Despite the court’s denial, attorney Bill Morgan asserted that the settlement agreement remains intact and viable. He outlined several potential scenarios for the next steps in the legal battle. One possibility is that both parties could file a motion to the Court of Appeals for a limited remand, seeking relief agreed upon by Ripple and the SEC from Judge Analisa Torres. If granted, this would allow both parties to file a motion with the judge to obtain the relief they initially agreed upon.

Morgan further explained that with the dissolution of the injunction and the payment of the reduced civil fine of $50 million, both parties could file a motion with the Second Circuit Court to dismiss the Appeal and cross-appeal. This would mark another joint motion by both parties, considered “procedurally correct.” Notably, Stuart Alderoty, the Chief Legal Officer at Ripple, expressed confidence that Ripple and the U.S. regulator will collaborate in court to address the issues raised by the judge.

Crypto expert Ashley Prosper highlighted several conditions that could prompt Judge Torres to vacate her decision. These include the emergence of new evidence that could significantly alter the court's perspective on the case, a change in the legal landscape that would make the current ruling obsolete, or a compelling argument from either party that the ruling was made in error. The expert discovery deadlines in the case have been vacated, allowing both parties more time to gather and present evidence.

Gary Gensler, the newly sworn-in Chairman of the SEC, has taken the lead in the lawsuit against Ripple. Gensler's vocal criticism of cryptocurrencies and his plans for tough enforcement actions have raised concerns in the crypto community about the SEC's intentions in the Ripple case. The rejection of the proposed settlement has also sparked questions about the future of the XRP token, with some analysts suggesting that the court's decision could impact its price. However, the actual impact remains uncertain, and any predictions should be viewed with caution.