By Jonathan Stempel NEW YORK (Reuters) -A federal judge on Thursday rejected an unusual joint motion by Ripple Labs and the U.S. Securities and Exchange Commission to endorse the cryptocurrency company’s reduced $50 million fine to settle a civil lawsuit over the sale of unregistered securities. U.S. District Judge Analisa Torres in Manhattan chastised both […]
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SEC, Ripple wants to settle crypto lawsuit, but US judge rebuffs them
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By Jonathan Stempel
NEW YORK (Reuters) -A federal judge on Thursday rejected an unusual joint motion by Ripple Labs and the U.S. Securities and Exchange Commission to endorse the cryptocurrency company’s reduced $50 million fine to settle a civil lawsuit over the sale of unregistered securities.
U.S. District Judge Analisa Torres in Manhattan chastised both sides for claiming that their settlement in March should excuse Ripple from honoring her permanent injunction against violating the law.
Ripple’s chief legal officer Stuart Alderoty posted on X that the company has not decided its next legal steps. An SEC spokesman had no immediate comment.
The case concerned sales of the XRP token, and has been one of the SEC’s highest-profile cryptocurrency cases.
In July 2023, Torres ruled that while XRP sold by Ripple on public exchanges did not meet the legal definition of a security, $728 million of XRP sales to institutional investors should have complied with securities laws.
Ripple and the SEC appealed, but agreed to settle if Torres set aside her injunction and approved lowering the $125 million fine she imposed last August.
The SEC has been easing oversight of cryptocurrencies, and the judge agreed it can change course on enforcement cases.
Torres said, however, that both sides had “not come close” to showing that exceptional circumstances outweighing the public interest and administration of justice justified the settlement.
“The parties do not have the authority to agree not to be bound by a court’s final judgment that a party violated an Act of Congress in such a manner that a permanent injunction and a civil penalty were necessary to prevent that party from violating the law again,” she wrote.
“Accordingly, if jurisdiction were restored to this court, the court would deny the parties’ request to vacate the injunction and reduce the civil penalty,” she added.
Torres said the SEC and Ripple remain free to withdraw their appeals, or appeal her injunction.
XRP is the fourth-largest cryptocurrency by market value, trailing bitcoin, Ethereum and Tether, the market service CoinMarketCap said on Thursday.
Since Donald Trump began his second term as U.S. president, the SEC has ended civil lawsuits against crypto exchanges Binance, Coinbase and Kraken.
The case is SEC v Ripple Labs Inc, U.S. District Court, Southern District of New York, No. 20-10832.
(Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy)