Judge Dismisses SEC and Ripple’s Bid to Halve Penalty

A U.S. federal judge has rejected a joint motion by the Securities and Exchange Commission and Ripple Labs to reduce the company’s penalty from $125 million to $50 million, labelling the request as “procedurally improper” and failing to meet the standards set by Rule 60 of the Federal Rules of Civil Procedure.

Judge Analisa Torres of the Southern District of New York, who has presided over the case since its inception in 2020, stated that while the parties may refile the motion, such relief is rarely granted and must serve the public interest. The court emphasized that any modification to a final judgment requires a compelling justification, which was not adequately presented in the joint motion.

The original penalty stemmed from Ripple’s sale of XRP tokens to institutional investors, which the court determined violated federal securities laws. The SEC had initially sought a $2 billion penalty, but Judge Torres imposed a significantly lower fine of $125 million, citing the absence of fraud or intentional misconduct in Ripple’s actions.

Ripple and the SEC had reached a settlement agreement in March 2025, wherein Ripple would pay $50 million, and the remaining $75 million held in escrow would be returned to the company. Both parties agreed to drop their respective appeals, and the SEC indicated its intention to request the lifting of the injunction previously imposed on Ripple.

However, the court’s recent decision underscores the importance of adhering to procedural rules when seeking to alter a final judgment. Rule 60 allows for relief from a final judgment under specific circumstances, such as newly discovered evidence or fraud, none of which were convincingly demonstrated in the joint motion.

The ruling also highlights the judiciary’s role in maintaining the integrity of legal proceedings and ensuring that any modifications to court orders are justified and in the public interest. The court’s insistence on procedural compliance serves as a reminder that settlements and agreements between parties must still align with legal standards and protocols.

As the case continues to unfold, the crypto industry watches closely, recognizing the broader implications for regulatory clarity and the enforcement of securities laws in the rapidly evolving digital asset landscape. The outcome of this case may set precedents for how similar cases are handled in the future, particularly concerning the classification and sale of digital assets.