27.06.2025 09:51
A New York judge has denied a joint motion from the Securities and Exchange Commission (SEC) and Ripple Labs seeking approval for a revised settlement agreement. This agreement would have significantly reduced Ripple's civil penalty to $50 million and vacated a permanent injunction against the company.
The judge, Analisa Torres of the Southern District of New York (SDNY), focused her objection on the proposed removal of the injunction, not the reduced penalty itself. The original $125 million penalty, imposed last year, had already been substantially lowered. Judge Torres' ruling clearly stated that a permanent injunction remained necessary given Ripple's substantial profits from past violations and the persistent risk of future infractions.
In her Thursday ruling, Judge Torres questioned the rationale behind eliminating the injunction. Her reasoning highlighted the inherent inconsistency: If the court had no concerns about future non-compliance, why would the parties seek to remove the very mechanism designed to ensure adherence to federal securities laws? The judge reaffirmed her previous finding of a "reasonable probability" that Ripple would continue violating securities laws, a probability that, according to the ruling, remains unchanged.
This joint request for settlement modification follows significant shifts within the SEC, stemming from the recent presidential election and subsequent changes in leadership. The new administration has adopted a markedly friendlier approach towards the cryptocurrency industry, notably establishing a Crypto Task Force and discontinuing various investigations and lawsuits.
However, Judge Torres highlighted a key distinction in her decision. Unlike the cases dropped by the SEC under its new leadership, Ripple's case involved a court finding of securities law violations. This critical difference, she emphasized, rendered the circumstances distinct and necessitated the continued enforcement of the injunction, regardless of recent shifts in regulatory approach at the SEC. The judge's decision underscores the court's independent assessment of the situation, unaffected by broader political or regulatory changes.
