US Court Once Again Dismisses Ripple·SEC Settlement Proposal

Cryptocurrency A to Z

Case Already Fined

Settlement Between Parties Cannot

Overturn a Final Court Ruling

Judicial Risk Causes XRP Decline

A US court has once again rejected the joint settlement proposal submitted by Ripple and the US Securities and Exchange Commission (SEC). Ripple is the company that issues XRP, the world’s fourth-largest cryptocurrency by market capitalization (formerly known as Ripple).

According to foreign media reports on the 29th, Judge Analisa Torres of the US District Court for the Southern District of New York in Manhattan dismissed the settlement between Ripple and the SEC on the 27th, stating, “When a violation of the law is clear and a permanent injunction and fine have been imposed to prevent recurrence, a court’s final judgment cannot be disregarded by a private settlement.”

This ruling reaffirms the principle that court rulings cannot be overturned by party settlements. Ripple and the SEC had submitted a revised settlement to the court on the 12th of this month. The proposal requested the withdrawal of the permanent injunction on XRP sales to institutional investors and a reduction of the fine (from $196 million to $50 million).

Following the ruling, Ripple’s legal risks resurfaced, with the price of XRP on Upbit, a major domestic cryptocurrency exchange, temporarily dropping about 3.8% to around ₩2,888. The price had been hovering near ₩3,000 recently before this short-term correction.

Going forward, Ripple and the SEC may either withdraw their existing appeals or respond by filing a new appeal against Judge Torres’s injunction. The procedures are expected to vary depending on their legal strategies.

Stuart Alderoty, Chief Legal Officer (CLO) of Ripple, stated on X (formerly Twitter) that the company has not yet decided on its legal strategy. The SEC did not issue a separate statement.

The SEC filed a lawsuit against Ripple in 2020, claiming it sold $1.3 billion worth of unregistered securities. Although Ripple won on some issues, disputes over the size of the fine and final settlement have continued for years.

Reuters reported, “Recently, the SEC has shown a tendency to lower the level of cryptocurrency sanctions, and Judge Torres also acknowledged this possibility of a shift in policy,” but added, “the court’s final decision must be respected and cannot be nullified by a private settlement.”

Kang Min-seung, BloomingBit Reporter minriver@bloomingbit.io