- Ripple’s Chief Legal Officer, Stuart Alderoty, emphasized that the court’s denial does not affect Ripple’s previous legal wins, including the classification of XRP as not a security.
- District Judge Analisa Torres called the motion procedurally improper and required a higher legal standard under Federal Rule of Civil Procedure 60..
Ripple Chief Legal Officer Stuart Alderoty strongly responded to U.S. District Judge Analisa Torres’ latest decision. In a May 15 ruling, Judge Torres denied the joint request from Ripple Labs and the Securities and Exchange Commission (SEC) for an indicative ruling. The motion was aimed at dissolving an injunction and reducing the $125 million civil penalty imposed on Ripple for alleged violations of securities laws.
Ripple CLO Remains Confident Despite Motion Dismissal
Following the order, Ripple CLO assured that XRP’s legal clarity remains intact despite the recent court decision. He wrote,
Nothing in today’s order changes Ripple’s wins (i.e., XRP is not a security, etc). This is about procedural concerns… Ripple and the SEC are fully in agreement to resolve this case and will revisit this issue with the Court, together.
This comes as Judge Torres declared, “The motion is DENIED” and ruled the request “procedurally improper.” The parties had asked the court to approve a proposed settlement under Rule 62.1 of the Federal Rules of Civil Procedure. However, the court found the motion failed to meet the legal threshold for such relief.
Citing SEC v. Citigroup Global Markets Inc., Judge Torres stated, “The district court must ‘determine whether the proposed consent decree is fair and reasonable, and whether the public interest would not be disserved.’” However, she also added, “What matters is the remedy sought, not how the parties seek it.”
Ripple and the SEC had requested the court to “(1) ‘dissolve’ the Court’s injunction prohibiting Ripple’s unlawful offer and sale of securities… and (2) reduce the $125,035,150 civil penalty… to $50 million.” But Judge Torres said this amounted to a motion to “vacate significant portions of the Final Judgment.” Hence, she added, “This request is properly made under Federal Rule of Civil Procedure 60.”
Further, Judge Torres noted that Rule 60 relief is granted “only upon a showing of exceptional circumstances.” The judge stressed, “The parties have made no effort to satisfy that burden here; their request does not even mention the rule.”
She also rejected the framing of the motion as a settlement request. The court filing stated, “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.”
Previous Rulings In the Ripple SEC Case
The court mentioned previous decisions to show that its judgments are final. In July 2023, it had held that Ripple “offered and sold unregistered securities in violation of Section 5 of the Securities Act.” It was this finding that the August 2024 Final Judgment relied on, leading to a permanent ban on similar actions by Ripple and a $125 million fine.
On September 4, 2024, the court withheld the enforcement of the judgment to give both sides time to negotiate a settlement. “The Court stayed enforcement… and ordered Ripple to deposit into an interest-bearing account an amount equal to 111% of the Civil Penalty,” the filing noted.
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