XRP Lawsuit Update: Ripple Faces Legal Setback in SEC Case

XRP is once again in the spotlight following a legal development that pushed the token’s value downward. After recent optimism surrounding the resolution of Ripple’s legal battle with the U.S. Securities and Exchange Commission (SEC), the case took a new procedural twist that left investors on edge.

On May 15, the cryptocurrency community was taken aback when Judge Analisa Torres of the U.S. District Court for the Southern District of New York denied a joint motion filed by Ripple and the SEC. The two parties had previously agreed to a reduced financial penalty totaling $50 million, down from the $125 million originally imposed. However, the judge found the motion procedurally flawed due to improper filing under Rule 60 of federal court procedure.

Legal expert James Filan shared the filing online, which clearly stated that even if the court’s jurisdiction had been reinstated, the motion would still be denied because of procedural issues. The proposed settlement, filed jointly on May 8, sought legal approval to finalize the reduced penalty, effectively bringing closure to the years-long case that began in 2020.

Ripple’s Chief Legal Officer, Stuart Alderoty, who previously confirmed the lawsuit was nearing an end, reacted swiftly to the judge’s ruling. He clarified that this setback had no bearing on the company’s previous victories, including the finding that XRP is not classified as a security. Alderoty emphasized that the procedural denial does not affect the substance of the agreement and expressed confidence that Ripple and the SEC will revisit the matter jointly.

In a public statement, Alderoty noted, “Nothing in today’s order changes Ripple’s wins (i.e. XRP is not a security, etc). This is about procedural concerns with the dismissal of Ripple’s cross-appeal. Ripple and the SEC are fully in agreement to resolve this case and will revisit this issue with the Court, together.”

The latest complication didn’t go unnoticed in the market. XRP had recently surged toward $2.70, indicating strong investor sentiment. However, the denial triggered an abrupt shift. The token slipped to $2.36, sharply retreating by over 5.5% in a short period. It has since staged a modest recovery, currently holding slightly above a key support level near $2.38.

Despite the legal hiccup, the broader market reaction has remained relatively contained. Bitcoin, for instance, continues to hover around $104,000, demonstrating some resilience amid the turbulence surrounding Ripple. Still, XRP’s visible dip reflects a larger concern among investors about the finality of its legal status and the lasting impact this case might have on regulatory clarity in the crypto space.

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

Looking ahead, the next steps for Ripple involve proper procedural re-filing of the agreement. Both Ripple and the SEC appear aligned on resolving the case through cooperative measures, meaning a complete conclusion might still be on the horizon. However, for holders of XRP, these procedural delays keep uncertainty alive as they await a definitive end to a saga that has influenced market dynamics for years.