A federal judge has denied a joint request by the SEC and Ripple Labs to approve a settlement that would have sharply reduced Ripple’s $125 million civil penalty and lifted a standing court injunction against future securities violations, according to an update from defense lawyer James Filan.

#XRPCommunity #SECGov v. #Ripple #XRP Judge Torres has denied the parties’ motion for an indicative ruling. “If jurisdiction were restored to this Court, the Court would deny the parties’ motion as procedurally improper.” pic.twitter.com/4s95ILvzsy

— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) May 15, 2025

In a ruling dated May 15, US District Judge Analisa Torres dismissed the joint motion, which had been filed earlier this month. The motion sought the court’s approval to dissolve a permanent injunction previously issued against Ripple and to reduce the civil penalty from $125 million to $50 million.

The move was seen as part of an ongoing attempt to resolve their years-long legal battle over alleged securities law violations.

The original penalty had been imposed after the court found that Ripple had violated the Securities Act by offering and selling unregistered securities to institutional investors.

In her order, Judge Torres stated that the request was filed improperly. Although it was presented as a motion for settlement approval, it was, in fact, a request for relief from the court’s August 2024 final judgment.

Such a request must comply with Rule 60, which requires a significantly higher legal standard—specifically, a showing of “exceptional circumstances” to justify relief from a final judgment.

“By styling their motion as one for ‘settlement approval,’ the parties fail to address the heavy burden they must overcome to vacate the injunction and substantially reduce the civil penalty. Relief from judgment under Rule 60 is granted only upon a showing of exceptional circumstances,” the order reads.

Judge Torres noted that the parties neither cited Rule 60 nor attempted to meet its demanding requirements.

With the proposed settlement rejected, Ripple remains bound by the August 2024 ruling, which found that its institutional XRP sales constituted unregistered securities offerings, imposed a $125 million fine, and barred future violations related to those sales.

While the rejection keeps that penalty intact, Ripple’s chief legal officer Stuart Alderoty emphasized that “nothing in today’s order changes Ripple’s wins.”

Alderoty added that the ruling was focused on “procedural concerns with the dismissal of Ripple’s cross-appeal” and clarified that both Ripple and the SEC remain aligned in resolving the case. He noted they plan to revisit the matter with the court together.

Updated to include commentary from Ripple chief legal officer Stuart Alderoty.