Ripple Speaks Out After Court Rejects Settlement With SEC

Following a recent federal court decision denying a joint request by Ripple and the U.S. Securities and Exchange Commission (SEC) to modify a previous judgment, Ripple has reaffirmed that XRP legal clarity remains unchanged.

The ruling was procedural in nature and has caused confusion among market participants. But Ripple’s legal team quickly addressed the concerns, saying the decision has no impact on the earlier court finding that XRP is not a security.

Ripple’s Legal Head Says: “Nothing Has Changed”

Stuart Alderoty, Ripple’s Chief Legal Officer, responded immediately after the court’s decision on X (formerly Twitter):

“Nothing in today’s order changes Ripple’s wins (i.e., XRP is not a security, etc.)”

He posted this after Judge Analisa Torres of the U.S. District Court for the Southern District of New York denied a motion filed jointly by Ripple and the SEC. The motion sought to reduce Ripple’s $125 million civil penalty to $50 million and dissolve a prior injunction.

Judge Torres dismissed the motion because it was “procedurally improper,” saying it should have been filed under Rule 60, which governs relief from final judgments in U.S. civil cases and requires proof of “exceptional circumstances.”

Alderoty noted the court’s ruling was purely procedural and did not revisit or overturn the July 2023 decision that XRP sales on secondary markets do not constitute securities transactions. That ruling remains the basis of Ripple’s legal position and continues to inform regulatory discussions around digital assets.

What Went Wrong With the SEC-Ripple Deal?

The failed motion was the result of an agreement between Ripple and the SEC on May 8 to settle parts of their case. The deal would have lifted the injunction that bars Ripple from future securities violations and reduced the financial penalty. But Judge Torres ruled the motion was filed incorrectly and didn’t meet the legal requirements to modify a final judgment.

Legal experts were quick to clarify this wasn’t a reversal. They aired that this wasn’t about the merits. The court simply found the parties used the wrong procedural method. A refiled motion using the correct rule could still be approved.

Ripple agrees. Alderoty said:

“Ripple and the SEC are fully in agreement to resolve this case and will revisit this issue with the Court, together.”

For now, they will refile the motion.

XRP Legal Clarity Remains a Rare Asset in the U.S. Crypto Space

The bigger picture of XRP legal clarity can’t be overstated in a regulatory environment that’s still a mess. Ripple’s 2023 court win put XRP as one of the only major cryptos in the U.S. with a judicial ruling that says typical retail sales don’t fall under securities law.

That has made XRP a unique asset for exchanges and financial institutions worried about SEC enforcement. After the initial ruling, XRP was relisted on Coinbase and Kraken and saw a resurgence in institutional interest.

Collaboration Could Shape Crypto’s Future

Despite the setback, Ripple and the SEC seem to be committed to resolving the remaining issues collaboratively. Their aligned approach in the rejected motion and the plan to resubmit it means a turn from confrontation to negotiated outcomes.

This is in line with other signs of regulatory evolution. Recent legislation in Congress aims to clarify digital asset definitions and set clear boundaries between the SEC and the Commodity Futures Trading Commission (CFTC). Ripple’s ongoing case and the established XRP legal clarity may influence how those frameworks are designed and implemented.

In the meantime, Ripple is building. The company is expanding its global payments infrastructure, onboarding new banking partners and investing in tokenization projects. According to CEO Brad Garlinghouse, the legal clarity around XRP has “given us the ability to scale with confidence in core markets.”

Conclusion: The Core Win Stands, Deal Delay Is Temporary

Ripple’s XRP legal clarity remains intact. The court’s rejection of the SEC deal was a procedural hurdle, not a reversal of the 2023 decision that said XRP is not a security in secondary markets.

For now, XRP has rare regulatory clarity in a space that’s still cloudy. While the path to full resolution may take more filings and a bit more time, the fundamentals haven’t changed.

The bottom line? The ruling didn’t disturb XRP legal clarity. If anything it confirmed Ripple is willing to work within the legal system while maintaining its competitive edge in compliance and innovation.

FAQs

Does the recent court ruling change XRP’s legal status?

No. The court’s decision only denied a motion and did not change the 2023 ruling that said XRP is not a security in secondary transactions.

Why was the SEC-Ripple joint motion denied?

The motion was denied because it was filed under the wrong rule. Judge Torres said it should have been filed under Rule 60.

Can Ripple and the SEC refile their motion?

Yes. Both can refile the motion under the correct rule and Ripple has confirmed they will.

What does XRP legal clarity mean for investors?

It means XRP is a crypto with a judicial ruling that says retail sales are not securities.

Is this the end of the Ripple-SEC case?

Not yet. Most points are settled but ongoing proceedings are around penalties and injunctive relief. More to come.

Glossary

XRP Legal Clarity: The confirmed status of XRP as not a security, according to a 2023 court ruling, specifically in secondary sales.

Rule 60: A US federal rule that allows a party to seek relief from a final judgment under certain conditions.

SEC (Securities and Exchange Commission): US agency that enforces securities laws.

Injunction: Court order that requires a party to do or not do something.

Final Judgment: A court’s last word on a case.

Sources

Stuart Alderoty via X

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