Judge Analisa Torres of the Southern District of New York has denied a joint request by the U.S. Securities and Exchange Commission (SEC) and Ripple to lift a permanent injunction in their dispute, a decision that prevented Ripple from significantly reducing its $125 million fine.
Judge Torres cited the SEC’s past view that Ripple would continue to violate the law in his court ruling today. “That has not changed, and neither party is arguing otherwise. Despite this, they request that the fine be reduced by 60% and the permanent injunction be lifted, citing public interest,” Torres said.
The parties had requested that, if the permanent injunction imposed on Ripple was lifted, $50 million of the $75 million fine be returned to the SEC and the remaining $25 million be returned to Ripple.
The SEC and Ripple litigation began in 2020. The SEC accused Ripple of raising $1.3 billion through unregistered securities sales. In July 2023, Judge Torres ruled that “programmatic sales” of XRP to individual investors were not securities, but direct sales to institutional investors were. This ruling resulted in a $125 million fine for Ripple.
In March, Ripple CEO Brad Garlinghouse announced that the case was effectively over, and the SEC withdrew its appeal. However, the final stages of the case focused on reassessing the amount of the penalty imposed.
The parties had requested that the penalty be reduced, citing the SEC’s change in approach to crypto assets in the new period. With the departure of SEC Chairman Gary Gensler, who was in office during the Biden era, in January, the institution ended its investigations and lawsuits against many crypto companies and began work on creating a regulatory framework by establishing a cryptocurrency task force.
But Judge Torres said, “Parties cannot avoid the binding force of a court decision by mutual agreement. In such cases, extraordinary circumstances must be shown in the public interest and in the interests of justice. This is not the case in this case.”
While the SEC did not comment on the matter, Ripple Legal Director Stuart Alderoty said in a statement on the social media platform X, “The ball is now in our court.” Alderoty stated that the court gave them two options, “To withdraw our appeal of the findings regarding past institutional sales or to continue the appeal.” He stated that the decision that XRP is not a security has not changed.
*This is not investment advice.
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