Judge Analisa Torres has rejected a $50 million settlement between Ripple and the SEC that would have dissolved the permanent injunction blocking the institutional sales of XRP.
The June 26 ruling maintains Ripple’s business restrictions indefinitely, despite both parties agreeing to reduce the original $125 million penalty by 60%.
Torres determined that the parties failed to show the “exceptional circumstances” required to vacate a final judgment, emphasizing that the public interest in securities enforcement outweighs private settlement agreements.
The decision means XRP remains legally restricted from institutional sales while retail trading continues unaffected.
Four Years of Legal Warfare Reaches Another Dead End
The SEC launched its investigation into Ripple in December 2020, alleging that the company conducted a $1.3 billion unregistered securities offering through XRP sales.
The case fundamentally challenged whether XRP constitutes a security or commodity under federal law, with implications for the entire digital asset industry.
Torres delivered a split decision in July 2023 that became crypto law’s most nuanced ruling.
She found that institutional XRP sales violated securities laws, while retail exchange sales did not meet the investment contract criteria under the Howey Test.
This subtle decision imposed a permanent injunction preventing Ripple from selling XRP to institutional buyers while allowing continued retail market operations.
The court also levied a $125 million civil penalty, which both parties subsequently appealed.
However, the May 2025 settlement agreement offered a path forward for both parties.
Under the proposed deal, Ripple would pay $50 million in exchange for $75 million of the original penalty, with the SEC requesting the removal of the institutional sales injunction.
The deal appeared to offer mutual relief, but Torres rejected the arrangement as “procedurally improper,” and criticized both sides for failing to justify vacating court-imposed restrictions.
She further noted that changing SEC policies under the Trump administration didn’t constitute exceptional circumstances since her court had already found securities violations.
Contrasting Fortunes in the New Regulatory Era of Trump
Ripple’s prolonged legal struggle stands in stark contrast to the swift resolution of other high-profile SEC cases in 2025.
The regulator has dropped enforcement actions against Coinbase, Cumberland DRW, and Gemini, while closing investigations into Uniswap, OpenSea, and Robinhood Crypto without pursuing charges.
These dismissals are part of a broader shift in SEC policy under acting Chair Mark Uyeda and incoming Chair Paul Atkins, who favor regulatory clarity over enforcement-heavy approaches.
The agency’s retreat from multiple crypto cases has generated optimism about a more collaborative regulatory framework.
Yet Ripple’s situation remains uniquely complicated by existing court findings of securities violations.
The institutional sales restriction has continually limited Ripple’s business development opportunities, particularly in partnerships with banks and financial institutions that were central to the company’s original strategy.
Meanwhile, the SEC faces ongoing criticism for maintaining enforcement positions that seem inconsistent with its broader policy evolution.
However, whether Ripple will benefit from a similar regulatory amnesty extended to other crypto firms remains uncertain. Unlike companies that settled before adverse rulings, the company must find a way to overturn a final judgment that determined institutional XRP sales violated federal law.
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