A U.S. federal judge has denied a joint request by the Securities and Exchange Commission and Ripple Labs to approve a reduced $50 million settlement and dissolve a prior court injunction in the agency’s long-running case against the crypto firm, Reuters reported.

U.S. District Judge Analisa Torres in Manhattan rejected the motion on Thursday, stating that the parties failed to demonstrate exceptional circumstances that would justify setting aside her earlier ruling.

This latest development has caused a decline in the price of XRP, now ranked 4th with a market capitalization of more than $125 billion. At the time of publication, XRP was down 3%, trading at $2.12.

Judge Rejects Ripple-SEC Settlement

In 2023, the judge had imposed a $125 million civil penalty and a permanent injunction against Ripple for selling XRP tokens to institutional investors without registering them as securities.

“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,” Torres wrote in her ruling. She added that the court would deny any request to vacate the injunction or reduce the penalty if jurisdiction returned.

Read more: XRP Price Analysis: These Analysts Predict Breakout by September as Price Holds Key Support

The joint settlement request, submitted in May, sought to resolve the case with a $50 million penalty, far below the SEC’s original demand of $2 billion. Both sides agreed to the proposal while their respective appeals remained pending. The Second Circuit Court of Appeals had granted a 60-day pause to allow the lower court to consider the motion.

Citing Supreme Court Precedent

Judge Torres cited Supreme Court precedent in her decision, emphasizing that enforcement actions involving violations of federal law cannot be reversed solely through private agreement. The SEC filed its initial lawsuit against Ripple in December 2020, alleging that the company raised funds through unregistered securities sales of its XRP token.

Torres later ruled in July 2023 that XRP sales on public exchanges did not meet the definition of securities, but that $728 million worth of XRP sales to institutional investors did fall under securities law.

In response to Thursday’s decision, Ripple Chief Legal Officer Stuart Alderoty posted on social media that the company has not yet determined its next steps. The SEC declined to comment.

This article was written by Jared Kirui at www.financemagnates.com.TrendingRead More

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