PANews May 16th news, according to Cryptoslate, US District Court judge Analisa Torres rejected the settlement motion jointly submitted by the US Securities and Exchange Commission (SEC) and Ripple. The motion was filed on May 8th, seeking the court to lift the injunction in the August 2024 judgment and approve the release of $50 million of the $125 million civil fine escrow to be paid to the SEC, with the remaining funds returned to Ripple.
The judge determined that the application did not comply with the procedural requirements stipulated in Article 60 of the Federal Rules of Civil Procedure. Both parties should have applied for relief after the judgment in accordance with this rule, but instead characterized the document as a request for “settlement approval”, citing “SEC v. Citigroup Global Markets” to justify the fairness and rationality of the proposed decree. Judge Torres held that this framework was not applicable to post-judgment situations and that both parties failed to meet the legal standards required to revoke early rulings or reduce fines. He emphasized that Rule 60 requires demonstrating special circumstances, but neither party has attempted to prove it.
The chief legal officer of Ripple stated that the court’s ruling will not change the decision in favor of Ripple. Ripple and the SEC fully agree to resolve this case and will jointly re-discuss the issue with the court. Legal experts analyzed that both parties need to provide detailed explanations of the reasons for the settlement in accordance with the standards of Rule 60, including the basis for the SEC’s decision to drop other charges, etc. It is estimated that the entire process will still take 3 to 5 weeks. The judge emphasized that this rejection was only aimed at procedural flaws and did not involve substantive review of the settlement content.
The case began in December 2020. The SEC accused Ripple of conducting an unregistered securities issuance by selling XRP. Ripple executives Brad Garlinghouse and Chris Larsen were also listed as co-defendants. In July 2023, Judge Torres made a mixed ruling, determining that Ripple’s institutional XRP sales violated federal securities laws, but the programmatic sales in the secondary market did not. In August 2024, the court issued a final ruling, imposing a civil fine of 125 million US dollars on Ripple and prohibiting it from further violating regulations. Subsequently, both the SEC and Ripple filed appeals with the Second Circuit Court of Appeals. In April 2025, the two sides jointly applied to suspend the litigation process on the grounds that they had reached a settlement agreement in principle. After the settlement motion was rejected, the SEC and Ripple must decide whether to amend the motion and complete the settlement through appropriate channels to end this four-year-long lawsuit.
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