Judge Denies SEC-Ripple Settlement Motion as XRP Lawsuit Continues

US District Judge Analisa Torres has denied a joint request from the SEC and Ripple Labs for an indicative ruling, labeling it “procedurally improper.” 

Judge Torres issued the decision on May 15, stating clearly that even if jurisdiction returned to her court, she would reject the motion based on procedural grounds.

What Does This Mean for the SEC and Ripple’s Latest Settlement?

This ruling means the previously agreed-upon settlement between Ripple and the SEC faces uncertainty. Earlier, both parties announced a settlement that would significantly reduce Ripple’s civil penalty from $125 million to $50 million. 

The deal also included dissolving an injunction that prevented Ripple from certain token sales.

However, Judge Torres highlighted that the joint request failed to meet the legal standard outlined under Federal Rule of Civil Procedure 60. This rule requires demonstrating “exceptional circumstances” to alter or dissolve a court’s final judgment.

Consequently, the initial injunction and original penalty remain in effect until both parties submit a proper motion addressing these procedural issues.

Nothing in today’s order changes Ripple’s wins (i.e. XRP is not a security, etc). This is about procedural concerns with the dismissal of Ripple’s cross-appeal. Ripple and the SEC are fully in agreement to resolve this case and will revisit this issue with the Court, together. https://t.co/vBQdBD3FNe

— Stuart Alderoty (@s_alderoty) May 15, 2025

The lawsuit itself has not been dismissed yet. Both Ripple and the SEC initially paused their appeals, anticipating the court would approve their joint settlement request. 

So, Judge Torres’ ruling means the appeals process could resume unless the parties submit a corrected motion.

The denial caused an immediate market reaction, with XRP’s price dropping shortly after the ruling was announced. The altcoin dipped nearly 5% today, despite the 15% gains over the past month. 

Investors and stakeholders had viewed the proposed settlement as a resolution to the longstanding legal battle.

Overall, the SEC and Ripple saga continues in its fifth year. Ripple has made significant developments and expansion in the US market following Trump’s pro-crypto regulations and the SEC’s enforcement changes.Yet, the XRP lawsuit remains a thorn in Ripple’s side, and legal complexities might keep it lingering further.