{"id":480340,"date":"2025-05-15T20:30:19","date_gmt":"2025-05-15T19:30:19","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=480340"},"modified":"2025-05-15T20:13:08","modified_gmt":"2025-05-15T19:13:08","slug":"court-denies-sec-ripple-settlement-motion-after-finding-procedural-misstep","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/court-denies-sec-ripple-settlement-motion-after-finding-procedural-misstep\/","title":{"rendered":"Court denies SEC, Ripple settlement motion after finding procedural misstep"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">US District Judge Analisa Torres denied a joint motion filed by the Securities and Exchange Commission (SEC) and <a href=\"https:\/\/cryptoslate.com\/companies\/ripple\/\">Ripple<\/a> for a proposed settlement to resolve the ongoing enforcement action over the sale of <a href=\"https:\/\/cryptoslate.com\/coins\/xrp\/\">XRP<\/a>.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Issued on May 15 and<\/span> <strong><a href=\"https:\/\/x.com\/FilanLaw\/status\/1923075612299649405\">shared on X<\/a><\/strong><span style=\"font-weight: 400;\"> by lawyer James Filan, the denial does not terminate the parties' settlement efforts but rejects the request as procedurally improper.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The motion, filed on May 8,<\/span> <strong><a href=\"https:\/\/cryptoslate.com\/sec-files-to-settle-lawsuit-with-ripple-execs-over-civil-penalty-dispute\/\">asked the court<\/a><\/strong><span style=\"font-weight: 400;\"> to signal whether it would dissolve the injunction from its August 2024 final judgment and approve the release of a $125 million civil penalty fund held in escrow.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Under the proposal, Ripple<\/span> <strong><a href=\"https:\/\/cryptoslate.com\/ripple-agrees-to-pay-50m-fine-and-drop-cross-appeal-to-settle-sec-lawsuit\/\">would pay the SEC $50 million<\/a><\/strong><span style=\"font-weight: 400;\">, with the remaining funds returned to the company. The SEC stated that the plan reflected its current enforcement priorities, with no intention to establish precedent.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These steps were part of the regulator's efforts to settle its long-standing legal battle with Ripple.<\/span><\/p>\n<h2><strong>Procedural flaw, not substantive rejection<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Judge Torres ruled that the parties' request failed to follow the proper procedure under federal rules.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Instead of seeking relief under Rule 60 of the Federal Rules of Civil Procedure, which governs post-judgment relief, the parties styled the filing as a request for &#8220;settlement approval,&#8221; citing SEC v. <a href=\"https:\/\/cryptoslate.com\/companies\/citigroup\/\">Citigroup<\/a> Global Markets to argue that the proposed decree was fair and reasonable.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Torres found this framing inapplicable to the post-judgment context and noted that the parties did not meet the legal standard required to vacate the earlier ruling or reduce the penalty.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The order stated that &#8220;their request does not even mention the Rule.&#8221; Judge Torres emphasized that Rule 60 requires showing exceptional circumstances, which the parties had not attempted to demonstrate.\u00a0<\/span><span style=\"font-weight: 400;\">She added that it would deny the motion even if the jurisdiction were restored.<\/span><\/p>\n<p>Ripple's chief legal officer, Stuart Alderoty, said the court's ruling does not change the decisions favoring Ripple.<\/p>\n<p>He added:<\/p>\n<blockquote><p>&#8220;This is about procedural concerns with the dismissal of Ripple\u2019s cross-appeal. Ripple and the SEC are fully in agreement to resolve this case and will revisit this issue with the Court, together.&#8221;<\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Crypto attorney Fred Rispoli<\/span> <strong><a href=\"https:\/\/x.com\/freddyriz\/status\/1923076378586452461\">commented<\/a><\/strong><span style=\"font-weight: 400;\"> on social media that the denial reflects a technical misstep, not a ruling against settlement itself.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He added:<\/span><\/p>\n<blockquote><p><strong>&#8220;The meaning here is that the parties didn't request relief under the right rule of civil procedure. So they will refile it under the correct rule but, me reading between the lines, is that Ripple and the SEC need to get on all fours and beg for relief.&#8221;<\/strong><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Rispoli further<\/span> <strong><a href=\"https:\/\/x.com\/freddyriz\/status\/1923079271100318191\">interpreted<\/a><\/strong><span style=\"font-weight: 400;\"> the court's tone as frustration with the procedural deficiency, suggesting the judge views it as a waste of time.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He <\/span><strong><a href=\"https:\/\/x.com\/freddyriz\/status\/1923081999515898252\">added<\/a><\/strong><span style=\"font-weight: 400;\"> that the lawyers did not file the motion incorrectly but rather opted for the \u201ceasy way\u201d and hoped Judge Torres would agree. Yet, Rispoli said the judge will make the lawyers \u201cdo the work now.\u201d<\/span><\/p>\n<blockquote><p><strong>&#8220;By styling their motion as one for &#8216;settlement approval,' the parties fail to address the heavy burden they must overcome to vacate the injunction and substantially reduce the Civil Penalty.&#8221;<\/strong><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">He advised that the SEC and Ripple now need to file a detailed motion under Rule 60 for approval, detailing the other cases being dropped with declarations from Commissioners and describing the SEC's failure to do any meaningful work on crypto guidance.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Rispoli estimated that such a filing would take two to three weeks to prepare, and the court's decision is expected to take another week or two after submission.<\/span><\/p>\n<h2><strong>Four-year dispute nears resolution<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">The case, filed in December 2020, alleged that Ripple conducted unregistered securities offerings through its sales of XRP. It also named Ripple executives <a href=\"https:\/\/cryptoslate.com\/people\/brad-garlinghouse\/\">Brad Garlinghouse<\/a> and <a href=\"https:\/\/cryptoslate.com\/people\/chris-larsen\/\">Chris Larsen<\/a> as co-defendants.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In July 2023, Judge Torres issued a mixed ruling, finding that Ripple's institutional XRP sales violated federal securities law but programmatic sales on secondary markets did not. The court later issued a final judgment in August 2024, imposing a $125 million civil penalty and enjoining Ripple from further violations.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Both the SEC and Ripple appealed the decision to the Second Circuit. The SEC filed its appellate brief in January 2025, and the parties jointly moved to<\/span> <strong><a href=\"https:\/\/cryptoslate.com\/sec-and-ripple-file-joint-motion-to-pause-appeals-to-pursue-settlement-terms\/\">suspend the proceedings in April<\/a><\/strong><span style=\"font-weight: 400;\">, citing an agreement in principle to resolve the case.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The May 8 motion intended to facilitate the next procedural step: an indicative ruling from the district court. This ruling would allow the parties to seek a limited remand from the Second Circuit and formally present the proposed relief to Judge Torres.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Instead, the SEC and Ripple must decide whether to revise their motion and proceed through the appropriate channels to finalize a settlement and close the four-year litigation.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>US District Judge Analisa Torres denied a joint motion filed by the Securities and Exchange Commission (SEC) and Ripple for a proposed settlement to resolve the ongoing enforcement action over the sale of XRP.\u00a0 Issued on May 15 and shared on X by lawyer James Filan, the denial does not terminate the parties&#8217; settlement efforts [&hellip;]<\/p>\n","protected":false},"author":1511,"featured_media":479195,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,77968,60793],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Court denies SEC, Ripple settlement motion after finding procedural misstep<\/title>\n<meta name=\"description\" content=\"Despite the denial, the ruling is not a substantive rejection, and both parties could refile the motion seeking relief under the right rule.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/court-denies-sec-ripple-settlement-motion-after-finding-procedural-misstep\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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