The Ripple community has been rocked by an unexpected twist. The years-long legal saga between Ripple and the Securities and Exchange Commission has taken a dramatic outturn. In a development that has sent shockwaves through the digital asset community, Judge Analisa Torres has outright rejected the jointly proposed $50 million settlement agreement between the two parties, forcing Ripple back to square one in its quest for regulatory clarity.
This setback brings back the full $125 million penalty and maintains all restrictions originally imposed on the company, throwing what seemed like a done deal into complete disarray and leaving investors, market analysts, and legal experts scrambling to understand the implications of this judicial rebuke.
The proposed settlement would have significantly reduced Ripple’s financial penalty from $125 million to $50 million, removed the injunction banning Ripple from future violations, returned remaining funds to the company, and closed all avenues for appeals. However, Judge Torres denied the request, citing procedural errors in how the motion was filed.
Ripple and SEC’s Bid to Overturn Judgment Stumbles on Procedure
The core issue, according to court documents, was that Ripple and the SEC filed their request under Rule 62.1, which is typically used when a case is already under appeal. What they were actually attempting to do—vacate a final judgment—requires filing under Rule 60. This technical error proved costly, as Rule 60 requires demonstrating “exceptional circumstances” to justify changing a final judgment. Neither Ripple nor the SEC presented arguments addressing this higher standard in their joint filing.
🚨 RIPPLE SETTLEMENT BLOCKED?! 🔒
Judge Torres just REJECTED the SEC & Ripple’s joint request to finalize their $50M settlement.
Both sides AGREED: but the judge said NO.
What happened? Here's the breakdown 🧵👇
1. Ripple & the SEC wanted to end the case:
– Cut Ripple’s fine…
— Jungle Inc Crypto News (@jungleincxrp) May 15, 2025Jungle Inc Crypto stated on X that the rejection carries significant implications beyond the financial penalty. The proposed settlement would have eliminated an injunction already issued by the court—a serious matter that requires substantial justification. Courts typically don’t overturn final rulings simply because both parties have come to an agreement. There needs to be compelling legal reasoning for such a reversal, which was absent in the joint filing from Ripple and the SEC.
Ripple Hits Legal Roadblock as Court Rejects Settlement
With the settlement rejected, Ripple now faces several potential paths forward. They could refile the request under the correct rule with strong justification for why the court should vacate its previous judgment. Another option is to modify their request to keep some elements of the original judgment while changing others. Alternatively, they might continue with the appeals process, though this carries additional risk.
Read Also: SEC and Ripple Drop Appeals, Reaching Final Settlement: How Could This Affect XRP?
According to Jungle Inc. Crypto on X, this represents a procedural setback rather than a complete rejection of the settlement’s substance. For now, the original judgment stands. Ripple remains liable for the full $125 million penalty, and the injunction against future violations remains in effect. This development underscores the complexity of high-stakes legal proceedings, where even when opposing parties reach an agreement, procedural requirements must still be strictly followed for courts to approve changes to final judgments. The legal chess match between Ripple and the SEC continues, with this latest development extending a case that both sides had hoped to resolve.
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