The ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs Inc. has reached another pivotal moment, as both parties have jointly urged the U.S. Court of Appeals for the Second Circuit to continue holding their appeals in abeyance.
This joint request follows their renewed attempt to persuade District Judge Analisa Torres to amend the final judgment, which could decisively shape the outcome of the case.
Previously, SEC and Ripple made motions that the two had settled the case, pending a specific change in the judgment that had been passed at the district court. The core of this settlement is when the injunction against allowing Ripple to provide XRP tokens to institutions in the U.S., which has been banned in the past, is broken, and the civil penalty of Ripple, which was more than $125 million, is decreased to $50 million.
In October 2024, the SEC first presented their notice of appeal, followed by the cross-appeal presented by Ripple shortly after. Under the settlement, Ripple LLC and SEC requested an indicative ruling from the district court; in other words, the defendant took a hint that the court would allow the case to be reversed should the appeals court permit its recession.
Their initial attempt, in May 2025, was denied by the district court on the grounds that they had not proved the existence of any of the exceptional circumstances invoked by Rule 60(b) to warrant a modification of the final order.
Exceptional Circumstances at the Heart of Renewed Motion
In response to the initial denial, parties again moved in tandem in June 2025, now clearly stating the exceptional grounds that warranted their application. The revised settlement structure further stipulates arrangements of redistributing the funds in the initial penalty escrow, with any remaining amount reimbursed to Ripple and the other matching the penalty demand specified by the SEC, which will be smaller than the original one.
Both parties are now aligned in their preference to resolve the matter without further appellate litigation. In case the district court consents to the amendment, SEC and Ripple will prepare a joint official motion to dismiss their proceedings. The legal status is, however, ambiguous until a ruling is made.
Meanwhile, SEC has assured the appellate court that the following update on the case will be written to it by August 15, 2025, as Judge Torres keeps deliberating on the modified motion.
Conclusion
Ripple and the SEC await Judge Torres’s decision, and the crypto industry is keeping an eye on it. A positive outcome can be an indication of a de-escalation in one of the most notable enforcement courses in the history of digital assets. In case of rejection, the parties will have to take lengthy litigation, which may stall the resolutions and clarity among XRP stakeholders.
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