Key Moments:
- XRP fell to $2.4 after a proposed $50 million settlement in an ongoing SEC case was rejected by the court on procedural grounds.
- Judge Torres ruled Ripple and the SEC’s motion was invalid due to failure to invoke Federal Rule of Civil Procedure 60.
- Both parties plan to refile the motion properly in an effort to reduce Ripple’s $125 million penalty.
Legal Misstep Sends XRP Sliding
XRP, the native currency of Ripple, witnessed its market value decline significantly following a pivotal court decision in the continuing legal dispute between Ripple Labs and the US Securities and Exchange Commission (SEC).
Judge Analisa Torres rejected a joint motion from Ripple and the SEC due to procedural violations. The settlement, had it gone through, would have reversed an earlier ruling and lowered Ripple’s penalty from the previous $125 million.
The markets’ reaction was swift, as XRP’s price tumbled significantly on Friday and reached $2.42. Traders viewed the legal uncertainty as a signal that a final resolution may be delayed.
The issue had to do with Ripple and the SEC’s failure to cite or adhere to Federal Rule of Civil Procedure 60, as explained by Attorney James K. Filan. This rule is key when seeking relief from a final legal judgment. Moreover, Judge Torres stressed that the motion aimed to overturn substantial elements of a final ruling that held Ripple accountable for selling unregistered securities to institutional investors. She reminded that only “exceptional circumstances” could justify such relief, a standard she said was not met in the current filing.
Ripple and SEC Chart Next Steps
Attorney Fred Rispoli acknowledged that Ripple and the SEC’s earlier filing attempt was a shortcut, and expects them to refile their motion by adhering to the proper rule. Ripple’s Chief Legal Officer, Stuart Alderoty, reiterated that the judgment does not negate Ripple’s earlier courtroom successes. He also confirmed that both sides remain cooperative in their goal of resolving the lawsuit.
To revive their settlement efforts, Ripple and the SEC may need to seek appellate court approval to make limited modifications to their case. Legal analyst Bill Morgan outlined the possible approach: dissolve the existing injunction, reduce the penalty to $50 million, and then request dismissal of related appeals.
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