Ripple, SEC request to cut down $125 million fine denied as New York judge maintains verdict
- Ripple and SEC's request to discard an injunction and reduce its $125 million civil penalty was denied by Judge Analisa Torres.
- Torres stated that the case could not be settled privately due to legal proceedings.
- The judge emphasized that public interest supersedes the agency's change in regulatory stance.
XRP is down 3% on Thursday as Judge Analisa Torres denied a joint request from the Securities & Exchange Commission (SEC) and Ripple seeking to set aside a final judgment and reduce the $125 million civil penalty placed on the company.
Ripple vs. SEC case continues as Judge Torres denies proposal for removal of injunction
Judge Analisa Torres dashed hopes of reducing the $125 million civil penalty fine imposed on Ripple or lifting an injunction against the firm after denying a joint proposal from the SEC and Ripple in a filing on Thursday.
Judge Torres stated that the court is "not persuaded" by the joint request, filed on June 12, to dissolve the permanent injunction and reduce the monetary penalty to $50 million, with the remaining $75 million to be returned to Ripple.
The SEC-Ripple motion aimed to end their multi-year legal dispute and avoid further litigation and appeals.
The case began after the SEC filed a lawsuit against Ripple in December 2020, accusing the company of conducting an unregistered securities offering via the sales of its XRP tokens. In 2023, Judge Torres ruled that Ripple had only violated securities law through its institutional sales of XRP. Ripple eventually received a civil penalty fine of $125 million in 2024, while the SEC's request for disgorgement was denied. The SEC appealed the ruling, prompting Ripple to file a cross-appeal.
However, both parties decided to drop their appeals after a change in the SEC's administration led to the agency shifting its approach toward cryptocurrency regulations.
Torres clarified that the parties do not hold the authority to overrule a court judgment based on a private agreement. To do that, she claims that the parties need to provide substantial evidence that can counter the court's decision.
"For that, the parties must show exceptional circumstances that outweigh the public interest or the administration of justice. They have not come close to doing so here," Torres said in the ruling.
The SEC mentioned, as part of its reasons for the proposal, that it has changed its regulatory approach to crypto under the new administration. It also stated that it launched a crypto task force division to develop a regulatory framework for crypto and has terminated other lawsuits against crypto-related companies. Since the resignation of former SEC Chair Gary Gensler and the appointment of new Chair Paul Atkins, the agency has become more open in its approach toward crypto regulations.
Despite this new approach to crypto, Torres stated that the SEC's shift in its regulatory stance is insufficient to alter the court's decision. She also noted that either no actual enforcement action was involved or a court judgment had not been reached in the other crypto cases dropped by the agency.
Judge Torres also noted that Ripple and the SEC could decide to withdraw or press forward with their current appeals. However, she revealed that neither action will require the court to "absolve Ripple of its obligations under the law."
Ripple's Chief Legal Officer, Stuart Alderoty, shared in an X post on Thursday that, regardless of the decision reached by both parties, "XRP's legal status as not a security remains unchanged."
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