Ripple Loses Ground To SEC In New Federal Ruling — Here’s The 411

Ripple is at a crossroads following Judge Analisa Torres’ ruling in the long-running lawsuit against the SEC. The crypto firm will now have to decide whether to drop the appeal or move forward with it to get relief from Judge Torres’ judgment. 

Ripple Faces Setback In Lawsuit Against SEC

A court document shows that Judge Torres has denied Ripple and the SEC’s joint motion for an indicative ruling. The ruling was meant to absolve the crypto firm as both parties requested the judge to dissolve the injunction and reduce the monetary judgment to $50 million from $125 million. 

Judge Torres declared that Ripple and the SEC have failed to show exceptional circumstances that outweigh the public interest or the administration of justice. As such, she isn’t persuaded to modify her judgment. She also made it clear that if jurisdiction were restored to her court, she would still deny the parties’ request to vacate the injunction and reduce the civil penalty. 

The court also highlighted the fact that nothing, in relation to Ripple’s violations, has changed since the ruling against the crypto firm, but both parties hardly pretend it has. Judge Torres noted the SEC’s arguments and how the Commission made it clear back then that Ripple would continue to violate securities laws without an injunction. 

As such, she rejected the argument that the injunction and civil penalty only relate to unique facts of the case and not public interest. She alluded to the fact that the Commission argued that a civil penalty was also necessary to send a strong deterrent message to Ripple and others. The judge was also not convinced by the argument that the SEC had dropped other enforcement actions, noting that the facts in those cases differed from the Ripple case. 

What’s Next In The XRP Lawsuit

Judge Torres remarked that Ripple and the SEC are free to withdraw their appeals if they genuinely want the lawsuit to end already. On the other hand, she stated that the crypto firm may continue with its appeal if it really desires relief from her final judgment. The judge made it clear that Ripple and the SEC do not have the authority to agree not to be bound by a final judgment. 

As such, they can’t simply set her judgment aside because they have a settlement agreement in place. Instead, only a higher court can set aside her judgment on appeal. Legal expert Fred Rispoli predicts that Ripple and the SEC will drop their appeals and agree on a $50 million settlement, with the injunction remaining in place. 

Ripple Chief Legal Officer (CLO) Stuart Alderoty noted that the ball is now in their court, and they will decide on what to do next. He agreed with Judge Torres that they can either drop the appeal or challenge the finding on the historical institutional sales with the appeal. Either way, he remarked that XRP’s legal status as not a security remains unchanged.

Featured image from Getty Images, chart from Tradingview.com