The Ripple vs SEC case continues to draw attention after Judge Analisa Torres denied both requests to dissolve the injunction and reduce the fine.
Why the Ripple vs SEC Case Matters
The main issue in today's Ripple vs SEC update is whether a joint settlement can override a final judgment to eliminate the permanent injunction and reduce penalties. The court stated that under the Federal Rules of Civil Procedure, revising a final judgment requires 'extraordinary circumstances.' Neither the SEC nor Ripple demonstrated such grounds, making the request procedurally improper and against public interest.
Settlement and Judicial Integrity
In May, Ripple and the SEC proposed a new settlement: Ripple would pay $50 million and the SEC would drop its appeal and injunction. However, Judge Torres declined to vacate the permanent injunction or reduce the penalty, citing a likelihood of future violations after past institutional sales of $728 million. She emphasized that such judicial measures are not negotiable through consensual settlement, especially when they serve investor protection and regulatory compliance.
Institutional Sales vs. Judicial Oversight
The original lawsuit in December 2020 alleged that Ripple sold XRP as unregistered securities. In July 2023, Judge Torres found that retail XRP sales were compliant with securities law but ruled that $728 million of institutional sales constituted violations. This ruling barred Ripple from institutional XRP sales, imposed a $125 million fine, and required them to appoint an independent compliance advisor. Judge Torres reiterated that these findings could not be dismissed by settlement, emphasizing the injunction as a legal deterrent and a measure for upholding federal securities enforcement.
Going forward, Ripple has several options: they can appeal the decision to the Second Circuit Court, withdraw settlement motions, or comply with current obligations while exploring new regulatory developments. Attention will also be on the potential legislative actions that may clarify crypto securities law.
