A U.S. federal judge has denied a joint request by the
Securities and Exchange Commission and Ripple Labs to approve a reduced $50
million settlement and dissolve a prior court injunction in the agency’s
long-running case against the crypto firm, Reuters reported.
U.S. District Judge Analisa Torres in Manhattan
rejected the motion on Thursday, stating that the parties failed to demonstrate
exceptional circumstances that would justify setting aside her earlier ruling. At the time of publication, XRP was down 3%, trading at $2.12.
Judge Rejects Ripple-SEC Settlement
In 2023, the judge had imposed a $125 million civil
penalty and a permanent injunction against Ripple for selling XRP tokens to
institutional investors without registering them as securities.
“The parties do not have the authority to agree not to
be bound by a court’s final judgment that a party violated an Act of Congress,”
Torres wrote in her ruling. She added that the court would deny any request to
vacate the injunction or reduce the penalty if jurisdiction returned.
The joint settlement request, submitted in May, sought
to resolve the case with a $50 million penalty, far below the SEC’s original
demand of $2 billion. Both sides agreed to the proposal while their respective
appeals remained pending. The Second Circuit Court of Appeals had granted a
60-day pause to allow the lower court to consider the motion.
Citing Supreme Court Precedent
Judge Torres cited Supreme Court precedent in her
decision, emphasizing that enforcement actions involving violations of federal
law cannot be reversed solely through private agreement. The SEC filed its initial lawsuit against Ripple in
December 2020, alleging that the company raised funds through unregistered
securities sales of its XRP token.
Torres later ruled in July 2023 that XRP sales on
public exchanges did not meet the definition of securities, but that $728
million worth of XRP sales to institutional investors did fall under securities
law.
In response to Thursday’s decision, Ripple Chief Legal
Officer Stuart Alderoty posted on social media that the company has not yet
determined its next steps. The SEC declined to comment.
This article was written by Jared Kirui at www.financemagnates.com.
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