In a surprising action that stunned the crypto world, U.S. District Judge Torres rejected a settlement proposal between Ripple Labs and the SEC. The deal was supposed to reduce Ripple’s penalty from $125 million to $50 million and remove limits on institutional XRP sales, but the judge said no. This decision has raised new worries about how unclear the regulations are and what this means for the future of digital assets in the U.S. This article looks at the details of the ruling, the history of the case, and its broader impact on Ripple, XRP, and the cryptocurrency industry as of June 27, 2025.
The SEC vs. Ripple Case
The SEC sued Ripple in December 2020, accusing the company of selling XRP its native cryptocurrency to institutional investors without registering it as a security. This case has been closely watched by the crypto world because it could shape how digital assets are regulated in the U.S.
In July 2023, Judge Torres made a key ruling: XRP isn’t a security when sold to the general public on exchanges , but it is a security when sold to institutions. This was a partial win for Ripple, clarifying that not all XRP sales fall under securities laws. However, the judge also ruled that Ripple’s sales to institutional investors broke the law. In August 2024, Ripple was fined $125 million and banned from selling XRP to institutional clients in the U.S. Both Ripple and the SEC appealed the ruling, meaning the legal fight is far from over.
The Denied Settlement Motion
Earlier this year, after SEC Chair Gary Gensler left and the new administration took a more crypto-friendly approach, Ripple and the SEC agreed on a settlement. The deal proposed reducing Ripple’s fine from $125 million to $50 million and removing the permanent ban on selling XRP to institutions, hoping to end the legal battle without more court fights. Both sides filed a joint motion asking the court to reconsider the case under Rule 60(b), which allows changing a judgment in special situations. This wasn’t their first try Judge Torres had already rejected a similar request in May because of procedural issues.
Then, on June 26, 2025, Judge Torres denied the motion again. She said court decisions serve the public, not just the parties involved, and the law doesn’t let courts undo rulings just because both sides agree unless there are exceptional reasons. She pointed out the SEC’s earlier claims that Ripple’s actions were “reckless” and “egregious” over eight years. The judge also explained that Ripple’s comparisons to cases like Coinbase and Kraken didn’t hold up because those cases were dismissed early and didn’t involve penalties or injunctions. Finally, Judge Torres noted that Ripple and the SEC could either drop their appeals or continue fighting the case in court, meaning this legal battle may still go on.
Reasons for Denial- Legal Principles and Public Interest
Judge Torres made it clear that court decisions exist to protect the public interest not just the parties involved. She didn’t see any special reason to change the final judgment, especially considering Ripple’s past violations and the risk they might break the rules again. She said the permanent injunction is important to make sure Ripple follows federal securities laws, particularly when selling XRP to institutions. This view is consistent with her earlier rulings and highlights how seriously the courts are taking regulation in the crypto world.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: Judge Torres has denied the parties’ Motion for an Indicative Ruling. pic.twitter.com/9AMhGcQUsU
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) June 26, 2025
Market Reaction and Community Insights
The judge’s decision to deny the settlement has stirred a lot of talk and worry in the crypto community. Many people are asking, “If both Ripple and the SEC want to settle, why is the judge saying no? Who benefits from dragging this case out? Who’s really protecting the status quo?” This shows a deeper concern that outside influences might be shaping the legal process, leaving Ripple and the whole industry in uncertainty. It’s been confirmed that Judge Torres rejected the $50 million settlement offer from Ripple and the SEC, turning down their joint request to approve the deal.
What’s Next for Ripple and XRP?
Because the settlement was denied, the permanent ban on Ripple selling XRP to institutional investors in the U.S. stays in place. This could seriously limit Ripple’s business with big investors and slow down XRP’s wider use. Since the court won’t just erase its earlier rulings, the case might now move forward to more legal battles, maybe even a full trial. This ongoing uncertainty could shake investor confidence in XRP and the crypto market, especially with regulators keeping a close eye on digital assets.
The ruling also shows how tricky it is to deal with unclear regulations in crypto even though the SEC seems more open to crypto under new leadership. After the Trump administration, there was hope for smoother rules with efforts like the Crypto Task Force and some crypto cases being dropped early. But Judge Torres’ decision reminds us that courts are independent and serious about enforcing securities laws.
As the case moves forward, everyone is watching how Ripple and the SEC will react to Judge Torres’ decision. They can either drop their appeals or keep fighting in court, but either way, the legal battle is likely to drag on. For Ripple, this ruling is a big setback it means they still have to pay the $125 million fine and the ban on selling XRP to big investors stays in place. For the whole crypto world, it’s a reminder that getting clear rules isn’t easy, even when the political climate seems more supportive.
A Turning Point for Crypto Regulation
Judge Torres’ decision to reject the Ripple-SEC settlement is a key moment in their ongoing legal fight. While the decision is based on legal rules and what’s best for the public, it has significant effects not just for Ripple and XRP, but for the entire crypto industry. As the case goes on, it will greatly influence how digital assets are regulated in the U.S., highlighting how tough it is to balance innovation and compliance in today’s Web3 world. The crypto community is divided, some see this as a setback, while others think it’s necessary to uphold the law. What’s clear is that the future of Ripple and XRP remains uncertain and is still undecided.
FAQs
- What is the Judge Torres Ripple ruling about?
Judge Torres denied a Ripple-SEC settlement motion to reduce a $125 million penalty and lift an injunction on XRP institutional sales. - Why did Judge Torres reject the settlement?
She ruled that court decisions serve the public, not just litigants, and found no exceptional circumstances to modify the judgment. - How has the market reacted to the Judge Torres Ripple decision?
The crypto community is shocked, with concerns about prolonged legal battles impacting XRP’s adoption and investor confidence. - What does the ruling mean for Ripple?
It maintains the $125 million penalty and injunction, limiting Ripple’s U.S. institutional sales and potentially affecting operations. - Will the Judge Torres Ripple case continue?
Yes, the parties may withdraw appeals or proceed to further legal proceedings, extending the legal uncertainty.
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About the Author: John Brok
