XRP Legal Status Unaffected by Ripple Settlement Rejection

XRP remains at the center of legal discussions, but the recent court rejection of a settlement proposal between Ripple and the SEC has no bearing on XRP’s classification or Ripple’s legal standing. Ripple’s legal leadership emphasized that despite the latest procedural hurdle, the company’s prior courtroom successes remain intact.

On May 15, a U.S. District Court judge turned down a joint motion filed by Ripple and the Securities and Exchange Commission. The motion requested a preliminary ruling on a proposed agreement to resolve lingering issues in the legal dispute. However, the court labeled the request as procedurally flawed because the parties failed to use the correct legal channels to make their case.

Ripple’s Chief Legal Officer, Stuart Alderoty, reassured the broader XRP community that this decision does not undo the company’s previous victory. As of March 19, Ripple had already publicly declared the legal confrontation settled, pointing to the SEC’s decision not to continue certain appeals.

Technical Misstep Behind Court’s Rejection

The presiding judge, Analisa Torres, indicated that the motion lacked the proper legal structure. By requesting “settlement approval” without referencing the relevant legal standards, the motion failed to meet the criteria required to reduce civil penalties or lift prior injunctions.

Earlier attempts by both parties to lessen the imposed financial penalties—originally set at $125 million—had resulted in an agreement that would allow the SEC to retain only $50 million. That adjustment, while significant, did not meet the burden necessary for formal approval according to the court’s expectations.

“Their request does not even reference the Rule,” Torres noted in the decision, pointing out the procedural basis for rejecting the settlement motion. While Ripple and the SEC appear united in wanting to bring the case to a close, the court requires stricter adherence to legal norms.

Community Frustration Over Lack of Transparency

The lack of a detailed public explanation has sparked concern within the XRP community. Many have taken to social media expressing dissatisfaction, arguing that Ripple owes users a clearer understanding of what caused the procedural failure. Some referenced prior statements from Alderoty and Ripple CEO Brad Garlinghouse asserting that the lawsuit had concluded, adding to the confusion around why the recent developments contradict those assurances.

One community voice criticized Ripple’s communication strategy, stating that citing “procedural concerns” without elaboration felt inadequate given the stakes. Others suggested that the ongoing nature of the legal wrangling contradicts claims that the matter was resolved, adding that public trust could be at risk without more transparency.

joint Ripple-SEC motion

according

announced the end of the lawsuit

lower the court’s $125 million fine

SEC will keep $50 million of the $125 million fine

Stuart Alderoty

Ripple commits $25M to US school nonprofits

speculated

allegedly manipulated by a Ripple-linked lobbyist

XRP token would be part of his plans

slamming Ripple

Danger signs for Bitcoin as retail abandons it to institutions: Sky Wee

In the broader context, some Bitcoin advocates remain wary of Ripple’s push for a multi-token system for national crypto reserves, favoring a more Bitcoin-centric framework. This divergence continues to stir debates about Ripple’s role in shaping digital asset policies at national and global levels.

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

As the situation unfolds, XRP holders and crypto observers remain focused on legal clarity, transparency, and the broader implications for how digital assets are regulated and adopted in institutional settings.