XRP Lawsuit: Judge Rejects Ripple-SEC $50M Deal Again

XRP continues to face legal challenges as a U.S. District Judge has once again rejected a joint attempt by Ripple Labs and the Securities and Exchange Commission (SEC) to settle a major part of their ongoing case. The latest ruling from Judge Analisa Torres dealt a blow to Ripple’s hopes of eliminating a court-ordered injunction while reducing its civil penalty to $50 million.

The rejected deal, submitted for an indicative ruling, aimed to cut Ripple’s civil penalty from $125 million to $50 million and remove the permanent injunction that currently restricts the company from violating securities laws. However, Judge Torres made it clear that removing the injunction without strong justification is unacceptable given Ripple’s previous federal securities violations and the substantial financial gains it made through those actions.

“If there’s no risk of Ripple breaking the law again, why insist on removing the legal requirement that says ‘follow the law’?” Judge Torres asked rhetorically in her ruling. She emphasized that the initial decision to impose the injunction stemmed from a ‘reasonable probability’ that Ripple would continue breaching securities regulations—something she believes remains a valid concern.

The backdrop to this latest legal maneuver is a shifting regulatory landscape. Following the election of President Donald Trump and the departure of former SEC Chair Gary Gensler, the agency has undergone a noticeable change in direction. With new leadership at the helm, including a pro-crypto Crypto Task Force led by Commissioner Hester Peirce, the SEC has softened its approach toward the cryptocurrency sector. Several lawsuits and probes have been dismissed, often before courts had reached any legal determination.

This softer stance hasn’t gone unnoticed or uncriticized. Corey Frayer, Director of Investor Protection at the Consumer Federation of America, noted, “The SEC has kept its credibility intact by not shifting arguments mid-litigation. But by granting leniency to crypto firms, current leadership risks tarnishing a 90-year legacy of enforcement integrity.”

This marks the second time Judge Torres has rejected such a settlement request between Ripple and the SEC. The first failed attempt occurred in May when procedural and jurisdictional issues undermined the filing. The latest submission, framed as an “expanded” request and supported by the argument of “exceptional circumstances,” didn’t sway the judge either.

The rejection document, available here, highlights Judge Torres’ refusal to accept that the proposed changes would serve the public interest or justice system. “Courts are not rubber stamps for parties who wish to rewrite legal consequences because it suits them,” she strongly asserted. “Ripple and the SEC are free to negotiate, but they cannot rewrite a final judgment issued for violations of Congress’ laws without proving overwhelming public interest justification. That has not been demonstrated.”

Judge Torres delineated the remaining options available if the parties are serious about resolving the case: either voluntarily drop their ongoing appeals or formally appeal the court’s judgment through legal channels. But under no circumstances should the court be expected to lift Ripple’s legal responsibilities casually.

“If Ripple and the SEC are truly seeking closure, those are their paths forward—neither of which bypasses existing legal responsibilities,” she concluded.

Related: Expert Advice: Sell XRP If You’re Confused

This ongoing legal saga involving XRP has broad implications for the cryptocurrency industry. As Ripple attempts to stabilize its regulatory standing, it remains caught between a progressively friendlier SEC and an uncompromising judiciary. The rejection of the settlement represents more than just a setback for Ripple—it also reinforces the court’s commitment to upholding its prior decisions regarding securities law violations in crypto.