XRP News Today: Judge Rejects Ripple SEC Settlement, XRP Institutional Sales Remain Blocked

Judge Analisa Torres has rejected a proposed $50 million settlement between Ripple and the Securities and Exchange Commission (SEC). This decision maintains the permanent injunction that blocks Ripple from selling XRP to institutional buyers. The settlement, which would have reduced the original $125 million penalty by 60%, was deemed procedurally improper by Torres. She emphasized that the public interest in securities enforcement outweighs private settlement agreements, and that the parties failed to demonstrate the "exceptional circumstances" required to vacate a final judgment.

The ruling means that XRP remains legally restricted from institutional sales, while retail trading continues unaffected. This decision comes after a lengthy legal battle that began in December 2020, when the SEC alleged that Ripple conducted a $1.3 billion unregistered securities offering through XRP sales. The case has significant implications for the entire digital asset industry, as it challenges whether XRP constitutes a security or commodity under federal law.

In July 2023, Judge Torres delivered a split decision that became a landmark ruling in crypto law. She found that institutional XRP sales violated securities laws, while retail exchange sales did not meet the investment contract criteria under the Howey Test. This decision imposed a permanent injunction preventing Ripple from selling XRP to institutional buyers, while allowing continued retail market operations. The court also levied a $125 million civil penalty, which both parties subsequently appealed.

The May 2025 settlement agreement offered a potential resolution for both parties. Under the proposed deal, Ripple would pay $50 million in exchange for $75 million of the original penalty, with the SEC requesting the removal of the institutional sales injunction. However, Torres rejected the arrangement, criticizing both sides for failing to justify vacating court-imposed restrictions. She further noted that changing SEC policies under the Trump administration didn’t constitute exceptional circumstances since her court had already found securities violations.

Ripple’s prolonged legal struggle contrasts with the swift resolution of other high-profile SEC cases in 2025. The regulator has dropped enforcement actions against several crypto firms, including Coinbase, Cumberland DRW, and Gemini, while closing investigations into Uniswap, OpenSea, and Robinhood Crypto without pursuing charges. These dismissals are part of a broader shift in SEC policy under acting Chair Mark Uyeda and incoming Chair Paul Atkins, who favor regulatory clarity over enforcement-heavy approaches.

The agency’s retreat from multiple crypto cases has generated optimism about a more collaborative regulatory framework. However, Ripple’s situation remains uniquely complicated by existing court findings of securities violations. The institutional sales restriction has continually limited Ripple’s business development opportunities, particularly in partnerships with banks and financial institutions that were central to the company’s original strategy. Meanwhile, the SEC faces ongoing criticism for maintaining enforcement positions that seem inconsistent with its broader policy evolution.

Whether Ripple will benefit from a similar regulatory amnesty extended to other crypto firms remains uncertain. Unlike companies that settled before adverse rulings, Ripple must find a way to overturn a final judgment that determined institutional XRP sales violated federal law. The decision by Judge Torres underscores the complexities and challenges faced by Ripple in navigating the regulatory landscape, as it continues to seek a resolution that allows for the unrestricted sale of XRP to institutional buyers.