Chiara Bianchi
A U.S. federal judge has rejected a joint request from Ripple Labs and the Securities and Exchange Commission (SEC), further prolonging their ongoing legal battle. The request sought an indicative rulingโa legal signal of how the court would rule if it had jurisdictionโto approve a proposed settlement agreement between the two parties.
The Southern District of New York Court, led by Judge Analisa Torres, declined the motion, labeling it procedurally flawed due to active appeals currently pending in the Second Circuit Court of Appeals.
Ripple and the SEC had recently reached a proposed settlement that would reduce Rippleโs penalties from $125 million to $50 million and lift an injunction set for August 2024. They hoped to streamline the process by asking the district court to indicate how it might rule if the case returned to its jurisdiction.
However, under Rule 62.1 of the Federal Rules of Civil Procedure, a district court cannot issue a final ruling if it no longer has jurisdiction, which is currently the case because cross-appeals are under review in the Second Circuit.
Judge Torres stated clearly:
“If jurisdiction were restored, the court would still deny the motion as it fails to meet procedural standards.“
She emphasized that vacating an injunction requires extraordinary justification, and the parties failed to show they met this high threshold.
Ripple Responds, Legal Experts Weigh In
Despite the setback, Rippleโs Chief Legal Officer Stuart Alderoty reassured supporters on X (formerly Twitter), saying:
“Todayโs ruling doesnโt reverse any of Rippleโs previous legal victories.“
Crypto attorney Fred Rispoli added his interpretation, suggesting that Ripple and the SEC filed their request under the wrong procedural rule.
โTheyโll likely refile using the appropriate legal avenue, but this ruling puts the pressure back on both parties,โ he said.
Background: A Pivotal Legal Battle for Crypto’s Future
The SEC initially filed suit against Ripple in 2020, alleging that its XRP token was an unregistered security. The lawsuit quickly became one of the most closely watched legal battles in crypto history, with its outcome expected to influence how cryptocurrencies are regulated in the U.S.
In a surprising turn, the SECโs stance on crypto has softened under President Donald Trumpโs pro-crypto administration. This year alone, the agency dropped enforcement actions against major players like Coinbase and Kraken, signaling a more favorable regulatory environment.
