XRP News Today: Judge Rejects Ripple SEC Motion to Lift $125 Million Penalty

A federal judge has rejected a joint motion filed by Ripple Labs and the U.S. Securities and Exchange Commission (SEC) to set aside a $125 million penalty and lift restrictions on Ripple's institutional sales of XRP. The judge's decision maintains the injunction imposed in 2024, which prohibits Ripple from engaging in certain sales activities involving XRP. This ruling comes after the parties submitted a motion earlier this month, marking their second attempt to convince the court to dissolve the permanent injunction and reduce the civil penalty under a proposed settlement. The motion sought to dissolve the injunction against Ripple and reallocate the $125 million civil penalty, proposing that $50 million be paid to the SEC and the remaining $75 million returned to Ripple.

The judge's rejection of the motion underscores the stringent legal standards required to alter a final judgment. The parties failed to demonstrate the "exceptional circumstances" necessary to justify modifying the court's decision. The judge also dismissed the argument that a change in SEC policy or the formation of a new crypto task force warranted erasing the penalty. The SEC and Ripple had cited other crypto-related cases where the SEC had voluntarily dismissed lawsuits, but the judge noted that those cases did not involve an injunction or a civil penalty and were dismissed before any court determined a legal violation had occurred.

The judge emphasized that if the SEC and Ripple wish to end the case, the simplest way is to withdraw their pending appeals. Alternatively, if the parties seek to have the court's rulings erased, they must follow the proper legal process by appealing the decision through the court system. This decision adds to the ongoing legal uncertainty surrounding Ripple and XRP, as the court has kept the $125 million civil penalty intact and left the permanent injunction fully in place. The ruling highlights the complexities and challenges involved in resolving high-stakes legal disputes in the cryptocurrency industry, where regulatory frameworks and judicial interpretations continue to evolve.

In 2023, Judge Torres ruled that XRP sold on exchanges did not violate securities laws—meaning the cryptocurrency is not a security. However, she found that institutional sales did violate securities laws, leading to the injunction and civil penalty imposed in August 2024. Ripple and the SEC appealed the ruling, with a settlement reached in March 2025 that could only proceed if the judge agreed to set aside her earlier decision. The parties had asked the court to approve a settlement in which the SEC would retain $50 million and return $75 million of the $125 million civil penalty. Notably, both parties also asked the court to pause their appeal of the final judgment pending the outcome of this motion.

Judge Torres rejected the latest motion, stating that it did not meet the “exceptional circumstances” required for a court to modify or vacate a final judgment. A similar motion filed on June 12, 2025, requesting an “indicative ruling,” also failed to persuade the court. The judge wrote, “The parties do not have the authority to agree not to be bound by a court’s final judgment that a party violated an Act of Congress in such a manner that a permanent injunction and a civil penalty were necessary to prevent that party from violating the law again.” Under the ruling, Ripple and the SEC may now choose to either withdraw their appeal or proceed with it and challenge the injunction. Stuart Alderoty, chief legal officer at Ripple, has said the company is yet to decide its next steps with regard to the matter. “With this, the ball is back in our court. The Court gave us two options: dismiss our appeal challenging the finding on historic institutional sales—or press forward with the appeal. Stay tuned. Either way, XRP’s legal status as not a security remains unchanged,” he posted on X.