Ripple CLO Says It Doesn’t Change XRP Win As Judge Blocks Ripple-SEC Settlement
May 16, 2025
U.S. District Judge Analisa Torres has rejected a joint request by Ripple and the SEC to modify key elements of a previously issued judgment.
The decision, detailed in a court order dated May 15, represents a procedural setback for Ripple and the SEC, who had reached an agreement earlier this month to conclude the case under revised terms.
Notably, the original motion in question, submitted on May 8, sought two primary changes: the removal of the permanent injunction prohibiting Ripple from engaging in future institutional sales of XRP, and a reduction of the $125 million civil penalty imposed on Ripple to $50 million.
This agreement followed a change in regulatory posture at the SEC, following the resignation of former SEC Chair Gary Gensler. The newly instated leadership has adopted a more conciliatory approach toward the crypto industry, seeking to wind down various high-profile enforcement cases, including this one.
Judge Torres Denies the “Settlement” Motion
Despite the joint support from both Ripple and the SEC for the proposed resolution, Judge Torres ruled that the motion had a procedural flaw.
According to her order, the parties filed the motion under the incorrect rule of civil procedure. They had framed their request as a motion for settlement approval but failed to meet the stringent legal requirements necessary to vacate a final judgment, such as the permanent injunction and penalty initially imposed.
Specifically, they did not reference or satisfy the criteria under Rule 60 of the Federal Rules of Civil Procedure, which governs motions for relief from final judgments. Judge Torres clarified that the court could grant such relief in rare and exceptional circumstances, which the parties had not demonstrated.
The judge stressed that if her jurisdiction were reinstated, as the case is currently on appeal, she would still deny the motion as improperly filed.
Ripple CLO, Other Legal Experts Comment
Following the decision, Stuart Alderoty, Ripple’s Chief Legal Officer, clarified the implications of the ruling. He stated that the denial does not undermine Ripple’s (XRP) prior legal victories, including the July 2023 judgment that XRP is not a security.
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.
— Stuart Alderoty (@s_alderoty) May 15, 2025
Alderoty noted that the setback is procedural rather than a reversal of any substantive win. He assured that both Ripple and the SEC remain committed to jointly resolving the matter. Essentially, he indicated that the parties would revisit the issue in court under the correct legal framework.
Further, Eleanor Terrett, journalist and host of Crypto in America, noted that legal experts believe Judge Torres is adopting a firm stance to ensure that the parties do not bypass the formalities required to undo five years of legal proceedings.
NEW: After speaking with three legal sources and tuning into @JohnEDeaton1’s live analysis, my read is that Judge Torres is playing hardball here—she’s not making it easy for the parties to simply walk away; instead, she’ll make them work for it. Deaton raises a valid point:…
— Eleanor Terrett (@EleanorTerrett) May 16, 2025
According to Terrett, attorney John Deaton pointed out that from the court’s perspective, the SEC’s sudden change in position could translate to an attempt to render years of litigation meaningless, prompting the judge to demand a more compelling justification.
Meanwhile, attorney Fred Rispoli argued that Ripple and the SEC had attempted an easier route to settlement but now face a more complex legal path. He suggested that the judge’s order shows the need for a more thorough and rule-compliant request if the parties wish to achieve their desired outcome.
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