tl;dr
A federal judge denied the SEC and Ripple Labs' joint motion to approve their settlement, citing procedural errors and lack of jurisdiction. The SEC and Ripple had sought a non-binding court signal to accept a deal reducing Ripple's $125 million fine to $50 million and dissolving an injunction. The ...
A federal judge denied the SEC and Ripple Labs' joint settlement approval due to procedural errors, despite their agreement to end a four-year legal battle. U.S. District Judge Analisa Torres ruled the motion was procedurally improper and noted the parties failed to follow Rule 60, which governs relief from final judgments.
The SEC and Ripple sought a non-binding court signal to accept a deal that would reduce Ripple's $125 million fine to $50 million and dissolve an injunction. However, jurisdiction over the case resides with the Second Circuit, where both parties have filed cross-appeals and a request to suspend appeals while negotiating a resolution remains undecided.
The lawsuit, originating in December 2020, accuses Ripple of raising $1.3 billion through unregistered XRP sales. In 2023, the court ruled that institutional sales violated securities laws, but retail sales on exchanges did not, providing a measure of optimism for the crypto sector.
Since recent changes in SEC leadership, enforcement actions in the cryptocurrency space have scaled back significantly, with several lawsuits being dropped. The current SEC chair is expected to continue a more lenient approach, contrasting with previous stricter policies.
Ripple confirmed it would pay the reduced $50 million fine, with the remaining $75 million held in escrow to be returned. Both parties remain committed to resolving the dispute amicably and plan to revisit the court together. XRP's price dipped slightly amid the news, trading at $2.42, down 1.6% on the day.