XRP News Today: Judge Denies Ripple SEC Motion to Vacate $125 Million Penalty

Judge Analisa Torres has denied a joint motion submitted by Ripple Labs and the U.S. Securities and Exchange Commission (SEC) to vacate the existing injunction and reduce Ripple’s penalty. This decision reaffirms the court’s August 2024 judgment, which imposed a $125 million civil penalty on Ripple and prohibited the company from selling its cryptocurrency, XRP, to institutional investors in the U.S. The court emphasized that the proposed settlement terms, including vacating the injunction, do not override the final public judgment. Judge Torres dismissed the precedents cited by both parties, noting that none involved civil penalties or injunctions like those issued in the Ripple case. She stated that the cited enforcement cases were dismissed before any finding of securities law violations.

Judge Torres underlined that the legal path forward lies in the existing appeal filed at the Second Circuit. She added that Ripple and the SEC are free to withdraw their appeals if they wish to resolve the dispute amicably, but cannot compel the court to revise its binding judgment. The judge further pointed out that the parties’ agreement conditioned the withdrawal of appeals on the dissolution of the injunction. “Dissolution of the injunction as a precondition to the termination of the parties’ appeals is only necessary because the SEC and Ripple made it so,” she noted. Ripple had hoped that the SEC’s recent shift in enforcement direction—dropping lawsuits against companies like Coinbase and Kraken after former SEC Chair Gary Gensler’s departure would strengthen its case. However, Torres dismissed that argument, saying those cases lacked any final judgment or penalties and were irrelevant to Ripple’s situation.

The appeal now shifts focus back to the appeals process. Ripple and the SEC have already appealed and cross-appealed in October 2024 and announced a settlement plan earlier this year. The ruling by Judge Torres has succeeded in countermanding that plan. According to legal experts, the rejection might prolong the legal fight. Australian lawyer Bill Morgan, a close follower of the case, described the motion as “crucially important” and alluded that it may be in Ripple’s best interests now to take the penalty and injunction to end the prolonged waiting. The injunction is still in effect, and Ripple is not allowed to sell XRP to institutions in the U.S without being registered. Although Ripple still holds the appeal option, the court has clarified that it will not overturn its decision with a compromise settlement.

The court's decision has sparked debate among legal experts and industry observers. Lawyer Bill Morgan, for instance, believes that the ruling will not redefine the status of XRP and other digital assets. This perspective contrasts with the broader speculation that the court's decision could have far-reaching implications for the regulatory landscape of cryptocurrencies. The ongoing legal battle between Ripple and the SEC continues to be a focal point for the industry, with stakeholders closely monitoring the developments for potential shifts in regulatory policy. Judge Torres' rejection of the joint motion underscores the complexity and significance of the legal dispute. The court's unwillingness to reverse its final ruling without an appeal highlights the importance of adhering to established legal procedures. As the case progresses, the outcome will likely have a profound impact on the future of cryptocurrency regulation and the broader digital asset market. The legal battle between Ripple and the SEC serves as a critical test case for how regulatory bodies will approach the oversight of digital currencies, with potential ramifications for the entire industry.