XRP News Today: Ripple SEC Case: Judge Rejects Penalty Reduction, Maintains $125 Million Fine

The legal standoff between Ripple Labs, Inc. and the U.S. Securities and Exchange Commission (SEC) over the cryptocurrency XRP has reached a pivotal moment. Legal experts suggest that the dispute may conclude without either party appealing the decision, following a ruling by Judge Analisa Torres in New York. This development is significant as it pertains to the legal framework governing digital assets and could potentially reduce civil penalties.

The ongoing legal case involves Ripple Labs, Inc., represented by CEO Brad Garlinghouse, against the SEC. Judge Torres's ruling in July 2023 indicated that XRP is not considered a security in secondary market sales, a decision that remains unaffected by the potential settlement. An eventual settlement may involve reducing the initial $125 million penalty to $50 million, with both entities agreeing to maintain the substantive judgment while negotiating the financial terms of the case.

Market observers are closely watching the situation, as the outcome could influence regulatory clarity and attract renewed institutional interest in the fintech industry. Legal expert Bill Morgan highlighted that existing rulings will not be altered, focusing instead on resolving injunctive terms. As the August 2025 deadline for SEC status approaches, optimism for a settlement remains.

In a recent development, a federal judge denied a joint request from both parties to reduce a $125 million penalty and lift legal constraints on Ripple’s institutional XRP sales. This decision maintains the injunction imposed in 2024, as announced by defense lawyer James Filan. The motion, submitted earlier this month, was the second attempt by Ripple and the SEC to convince the court to dissolve the permanent injunction and reduce Ripple’s civil penalty under a proposed settlement. The initial attempt was rejected by Judge Torres for failing to demonstrate the “exceptional circumstances” necessary to justify modifying a final judgment.

Judge Torres cited the need for finality in court decisions as the reason for rejecting the second bid. The parties did not meet the strict legal standard required to alter a final judgment. The judge also dismissed the idea that a change in SEC policy or a newly formed crypto task force justified erasing the penalty. In their joint motion, the SEC and Ripple cited other crypto-related cases where the SEC had voluntarily dismissed their lawsuits. However, Judge Torres noted that those cases never reached a final ruling, unlike the Ripple case. In each example, the SEC withdrew before any court determined that a legal violation had occurred.

The judge emphasized that if the SEC and Ripple want to end the case, the simplest way is to withdraw their pending appeals. Otherwise, if the parties wish to have the court’s rulings erased, they must follow the proper legal process by appealing the decision through the court system. This ruling underscores the complexity and legal intricacies involved in the case, which has been ongoing since the SEC filed a lawsuit against Ripple in December 2020. The case revolves around whether Ripple offered XRP as a security without registration, in violation of federal securities laws.

The denial of the settlement agreement by Judge Torres has significant implications for both Ripple and the broader cryptocurrency market. The judge’s decision to maintain the injunction and the $125 million penalty highlights the regulatory challenges faced by cryptocurrency companies. The case serves as a precedent for future regulatory actions and underscores the importance of compliance with securities laws. The outcome of this legal battle could influence the regulatory landscape for cryptocurrencies, potentially affecting how other companies navigate the complex legal environment.

The legal battle between Ripple and the SEC has been closely watched by industry observers and investors alike. The denial of the settlement agreement by Judge Torres adds another layer of uncertainty to the case. The judge’s ruling that the parties can withdraw their appeals or challenge her injunction leaves the door open for further legal maneuvers. The case highlights the need for clear regulatory guidelines and the potential impact of legal decisions on the cryptocurrency market. As the legal battle continues, the outcome will have far-reaching implications for the future of cryptocurrencies and regulatory compliance.