Will the Ripple-SEC Lawsuit Be Extended? Uncertainty Rocks Community Following Shocking Turn

In a dramatic turn for one of the crypto industry’s longest-running legal battles, U.S. District Judge Analisa Torres has denied a joint motion filed by Ripple Labs and the Securities and Exchange Commission (SEC) that sought to amend key aspects of their ongoing lawsuit over XRP.

The decision has reignited uncertainties around the status of the case and cast fresh doubts over when—or if—the four-year-long battle will finally come to an end.

Rejected Motion Aimed to Reshape Ripple’s Legal Fate

On May 8, Ripple and the SEC submitted a joint motion requesting the removal of a permanent injunction on Ripple’s institutional XRP sales and a reduction in the company’s civil penalty from $125 million to $50 million. 

Both sides argued that they had reached an understanding to move forward with a revised settlement, including withdrawing appeals and finalizing penalties.

Also Read: Ripple CLO Gets Recognition for His Role in The SEC Lawsuit – Brad Garlinghouse Reacts

However, in a May 15 court order, Judge Torres declined the motion, citing procedural flaws and an insufficient demonstration of how the revised terms would serve the public interest. 

The decision temporarily halts efforts to conclude a legal saga that has dragged on since December 2020.

SEC’s Strategic Pivot Stumbles in Court

The denial is a setback for the SEC, which has shown signs of adopting a less confrontational stance under its evolving leadership. 

Following the resignation of former Chair Gary Gensler, sources close to the agency suggest that internal sentiment has shifted toward resolving high-profile crypto cases rather than pursuing them indefinitely.

Under these new dynamics, the SEC appeared more open to compromise. The agency’s agreement with Ripple included dropping its appeal over secondary XRP sales, sales made on exchanges rather than directly to institutional investors, and amending financial penalties related to institutional violations.

Yet Judge Torres emphasized that such significant changes require a proper procedural path and a clear explanation of how the public interest would be preserved, especially in light of her prior ruling that Ripple’s institutional XRP sales violated securities law.

Legal Experts: This Is a Misstep, Not a Defeat

Prominent blockchain legal analysts suggest the motion was rejected on procedural, not substantive, grounds. Attorney Fred Rispoli remarked that Ripple and the SEC failed to use the correct rule under federal procedure for the type of relief they sought. 

Instead of marking the end of settlement efforts, this ruling is seen as a prompt to refile the motion correctly. XRP advocate and legal expert John Deaton noted that the parties had requested an “indicative ruling,” a procedural step to see if Judge Torres would approve the revised agreement should the case be sent back from the appeals court.

But the court found this insufficient without formal briefing and a detailed legal rationale.

What Happens Next

The parties must now regroup and resubmit their motion using the proper procedural channels. That will likely involve filing a joint brief clearly justifying why removing the injunction and reducing the penalty aligns with Judge Torres’ previous findings and serves the broader public good.

Until then, the case remains in limbo, paused in the Second Circuit Court of Appeals. While a final resolution is still within reach, legal experts like Deaton warn that the process could drag out for several more months.

Final Thoughts

This latest twist in the SEC v. Ripple case not only prolongs uncertainty for XRP but also highlights the broader regulatory tensions surrounding digital assets. With U.S. regulators under growing pressure to clarify their approach to crypto, the outcome of this case could shape enforcement strategies for years to come.

Meanwhile, Ripple continues to push for regulatory clarity and global expansion. The company has recently renewed its lobbying efforts in Washington and accelerated its hiring outside the U.S., suggesting its eyes remain on long-term growth regardless of domestic legal hurdles.

Also Read: XRP and Solana Tumble as Bitcoin Nears $104K in Market Shake-Up

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