Judge rejects SEC and Ripple’s proposed settlement deal, upholds $125M penalty

By: crypto briefing|2025/05/15 19:30:09
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A federal judge has denied a joint request by the SEC and Ripple Labs to approve a settlement that would have sharply reduced Ripple’s $125 million civil penalty and lifted a standing court injunction against future securities violations, according to an update from defense lawyer James Filan. In a ruling dated May 15, US District Judge Analisa Torres dismissed the joint motion , which had been filed earlier this month. The motion sought the court’s approval to dissolve a permanent injunction previously issued against Ripple and to reduce the civil penalty from $125 million to $50 million. The move was seen as part of an ongoing attempt to resolve their years-long legal battle over alleged securities law violations. The original penalty had been imposed after the court found that Ripple had violated the Securities Act by offering and selling unregistered securities to institutional investors. In her order, Judge Torres stated that the request was filed improperly. Although it was presented as a motion for settlement approval, it was, in fact, a request for relief from the court’s August 2024 final judgment. Such a request must comply with Rule 60, which requires a significantly higher legal standard—specifically, a showing of “exceptional circumstances” to justify relief from a final judgment. Judge Torres noted that the parties neither cited Rule 60 nor attempted to meet its demanding requirements. With the proposed settlement rejected, Ripple remains bound by the August 2024 ruling, which found that its institutional XRP sales constituted unregistered securities offerings, imposed a $125 million fine, and barred future violations related to those sales. This is a developing story.

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