Judge Rejects Ripple-SEC Settlement Bid Over Procedural Misstep

U.S. District Judge Analisa Torres has denied a joint motion filed by Ripple Labs and the U.S. Securities and Exchange Commission (SEC) seeking an indicative ruling on a proposed settlement. The request aimed to determine if Judge Torres would approve the settlement should the U.S. Court of Appeals for the Second Circuit remand the case to her court.

The proposed agreement included a significant concession from the SEC, which agreed to lift the injunction imposed in the final judgment last August. Ripple’s penalty would have also been reduced to $50 million under the terms of the deal. However, Judge Torres ruled that the motion was “procedurally improper,” stating that the parties failed to submit the correct type of legal request required to amend a final judgment.

In her decision, Torres emphasized that final judgments are intended to be binding and can only be vacated under extraordinary circumstances such as newly discovered evidence or fraud. The judge added that neither Ripple nor the SEC addressed the substantial burden required to justify lifting the injunction or reducing the civil penalty.

This decision is a setback for Ripple, which has been locked in a legal battle with the SEC since 2020 over the classification of its XRP token. The ruling underscores the difficulty of altering a court’s final decision, even with mutual agreement from both parties.

While the door isn’t completely closed on a future amendment, Judge Torres made it clear that any future attempts would require strong justification and proper legal procedure. The SEC and Ripple may need to return with a revised motion that meets legal standards if they wish to move forward with a settlement.