- Judge Torres denied Ripple and the SEC’s joint settlement request to lift an injunction and reduce penalties from US$125 million to US$25 million, ruling it was “procedurally improper” as they failed to file under the correct Rule 60(b) motion.
- Ripple’s Chief Legal Officer Stuart Alderoty reassured XRP holders that “Nothing in today’s order changes Ripple’s wins” regarding XRP’s non-security status, describing it as merely a procedural issue that both parties will revisit with the court.
- Attorney Fred Rispoli characterised the situation as a minor setback, but suggested they may need to “get on all fours and beg for relief” to convince Judge Torres.
- XRP’s price dropped nearly 8% following the news to US$2.36, still trading 38% below its all-time high of US$3.84 from January 2018.
Just when we thought the epic court case between San Francisco-based fintech Ripple and the US Securities and Exchange Commission (SEC) had ended, there’s another plot twist.
Judge Torres held that vacating the final judgment was procedurally improper because Ripple and the SEC failed to bring the correct Rule 60(b) motion under the Federal Rules of Civil Procedure.
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On May 8, Ripple and the SEC submitted a joint settlement, asking the court both to lift the August 7, 2024 injunction barring Ripple’s “unlawful offer and sale of securities” and to slash Ripple’s civil penalty from US$125 million (AU$194.8 million) to US$25 million (AU$38.9 million).
Judge Torres ruled that the parties had improperly framed their request – treating it as a settlement-approval motion rather than as a motion for relief from judgment under Rule 60(b).
Since vacating an injunction and reducing a penalty demands an exceptional circumstance showing and must invoke the proper procedural vehicle, the court concluded it could not – and would not – grant the relief as pled, calling the motion “procedurally improper”.
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Ripple Legal Chief Says Nothing Has Changed
It’s not all bad news, though, Ripple’s Chief Legal Officer Stuart Alderoty said. He took to Crypto Twitter to reassure XRP holders that “Nothing in today’s order changes Ripple’s wins”, meaning XRP is not a security.
Alderoty added that this is just a procedural issue:
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, Ripple Legal ChiefAttorney, trial lawyer and long-term observer of the case, Fred Rispoli, agreed, saying that this is a minor setback as “the parties didn’t request relief under the right rule of civil procedure”.
Ripple, SEC to “Beg for Relief”, Says Attorney Rispoli
However, he also suggests that Judge Torres may not be amused by having her ruling challenged and may need to be convinced by the parties:
So they will refile it under the correct rule but, me reading between the lines, is that Ripple and the SEC need to get on all fours and beg for relief.
Fred Rispoli, AttorneyXRP, meanwhile, might have slightly overreacted to the news, with the price dipping almost 8 per cent in the past 24 hours, more than most other crypto assets.
At the time of writing, XRP trades at US$2.36 (AU$3.68), still 38 per cent short of its all-time high of US$3.84 (around AU$6) from January 2018.
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