The prolonged legal clash between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has faced another legal hurdle. Judge Torres has refused to grant the request to rule now on future orders, even though both parties wanted the court to consider a proposed settlement agreement.
According to James K. Filan, a respected legal voice in the XRP community, the motion was rejected because it was “procedurally improper.” The court clarified that the motion would not have succeeded even if jurisdiction had been restored. The parties attempted to dissolve the existing injunction against Ripple and reduce the civil penalty from $125 million to $50 million.
Ripple and the SEC agreed at an earlier stage to leave the case to the court for resolution by asking it to lift the injunction. The regulators suggested that means strings paid by Ripple worth $50 million would meet the conditions of the penalty. Still, they filed their request using *Federal Rule of Civil Procedure 62.1*, which applies to motions made during an appeal. The motion presented by the companies did not follow the proper rules set by the court, according to Judge Torres’ decision.
Background of the Dispute and Recent Motion
The lawsuit was initiated when the SEC sued Ripple in 2020 for allegedly selling and promoting XRP as securities without registration. A 2023 decision by Judge Torres found that XRP sales made by individuals through public exchanges were not considered illegal, whereas those by the institutional aspect of Ripple were illegal.
On August 7, 2024, the court issued a Final Judgment ordering Ripple to stop violating the law and pay the applied civil penalty. The court granted a stay on this penalty, and Ripple had to keep funds in an interest-bearing account.
Court document 984 explains that after the judgment, both parties appealed and wanted to resolve the dispute by lifting the ban and decreasing the penalty. At the same time, the court pointed out that to amend the decision, they would need a formal process, not the one described by the petitioners.
Judge Torres Signals a Higher Threshold for Case Resolution
Eleanor Terrett, a legal analyst, pointed out that it is unlikely that Judge Torres will let the parties skip all their efforts into the case without meeting strict rules. She suggested that the judge seemed firm because she wanted to ensure the court kept its reputation for fairness, considering the long history of the SEC going to court and putting lots of money into these kinds of cases.
Attorney John Deaton noted that Torres could be wary of trying to reverse a decision that grabbed so much public and legal interest. Deciding to require a careful legal explanation prevents a quick and hasty decision.
As a result, the order does not affect previous courts’ announcements that XRP is not a security when used on digital asset exchanges. Ripple Labs’ general counsel, Stuart Alderoty, said the outcomes of past rulings in favor of Ripple are unchanged and that the recent motion only seeks minor procedure updates.
Conclusion
If they wish to settle the case, Ripple and the SEC must return to court with a new strategy that follows the procedures. The judge has clarified that any agreements must follow established rules of law.
