In a dramatic turn in the ongoing SEC vs. Ripple lawsuit, Judge Analisa Torres rejected a joint request from Ripple Labs and the Securities and Exchange Commission that pursued a path toward settlement.
The motion asked the court to remove the ban stopping Ripple from selling XRP to institutions and to lower the civil fine from $125 million to $50 million. The judge, however, denied the request, calling it “procedurally improper.”
The main issue is the procedure that was used. The parties invoked Federal Rule of Civil Procedure 62.1, which allows a district court to make a non-binding indicative ruling when its authority is limited due to an ongoing appeal.
Judge Torres ruled that even if jurisdiction had been restored, she would have denied the motion. Moreover, Torres pointed out that the parties hadn’t met the necessary legal standard for this relief.
Settlement motion delays amid procedural misstep
The motion, filed on May. 8, 2025, follows Ripple’s lawyers signed a settlement agreement on Apr. 23 that the SEC later approved. Both sought approval of their agreement under the SEC v. Citigroup Global Markets Inc. standard, which allows for reviewing consent agreements.
This kind of relief is only granted in truly exceptional situations, based on the legal precedent cited by the judge. However, the motion didn’t reference Rule 60 at all. Instead, Ripple and SEC submitted the proposal as a “settlement,” but they mistakenly used the wrong procedure. That mistake proved to be fatal.
Attorney Bill Morgan explained that the settlement process was underway but got derailed at the fourth step when the court dismissed their indicative ruling due to a procedural error. The court stated that if they wish to continue, the parties must re-file following the correct procedure.
Ripple and SEC still aligned on settlement
Despite the procedural hiccup, Ripple’s Chief Legal Officer, Stuart Alderoty, assured that both parties remain committed to the settlement. He stressed that the court’s decision was about how they should submit, not the content of their submission.
Ripple and SEC are cooperating to resolve the case. The next move should be a revised joint motion supported by Rule 60. If approved, it would parties to proceed with a reduced penalty and revoke the sales ban, the last steps bring the high-profile case closer to a conclusion.
