Ripple Settlement Rejected by Judge Over Injunction Concerns

A New York judge has denied a joint settlement request from the U.S. Securities and Exchange Commission (SEC) and Ripple Labs that sought to reduce Ripple’s civil penalty to $50 million and remove a permanent injunction. Judge Analisa Torres of the Southern District of New York ruled that lifting the injunction was unjustified, citing Ripple’s past violations and its ongoing incentive to disregard federal securities laws.

The original penalty, set at $125 million, had been imposed in 2023 following the court’s finding that Ripple had unlawfully raised funds through unregistered XRP sales. While the penalty reduction drew less concern, Torres emphasized that removing the injunction contradicted her prior judgment, which was based on the likelihood of future violations.

Torres questioned why Ripple and the SEC wanted to eliminate the court’s legal safeguard if they believed Ripple no longer posed a risk. She noted that neither party presented new evidence to justify such a reversal and highlighted that the court’s prior ruling remains binding. The judge also pointed out that a court judgment enforcing a congressional act cannot be undone without exceptional public interest reasons, which she found lacking in this case.

The rejection follows a shift in SEC policy under President Trump’s administration, marked by the resignation of former SEC Chair Gary Gensler and the agency’s pivot toward a more crypto-friendly stance. Despite forming a new Crypto Task Force and easing enforcement actions, the SEC’s latest move was seen by critics as undermining its credibility.

Judge Torres concluded that Ripple and the SEC must either drop their appeals or proceed through the appellate process—without asking the court to rewrite its final ruling. The ruling reinforces the judiciary’s role in upholding legal accountability in the crypto space.