Thomas Daniels
In a firm stance on regulatory enforcement, U.S. District Judge Analisa Torres has rejected a joint request by Ripple Labs and the U.S. Securities and Exchange Commission (SEC) to reduce a $125 million civil penalty and vacate a permanent injunction tied to Ripple’s institutional sales of XRP.
The decision reaffirms the federal court’s July 2023 judgment that while public trading of XRP does not constitute a securities transaction, Ripple’s sales to institutional investors violated Section 5 of the Securities Act. Judge Torres emphasized that these rulings remain consistent with congressional securities laws and that the judicial process cannot be circumvented through post-verdict agreements.
“The court granted the SEC’s request for an injunction and civil penalty because Ripple’s actions demonstrated a likelihood of ongoing violations,” Torres wrote. “None of this has changed—and the parties hardly pretend that it has.”
Ripple and the SEC had argued that it served the public interest to reduce the penalty by 60%, allowing Ripple to pay $50 million and retrieve $75 million from an escrow fund. They also sought to lift the injunction placed on Ripple’s institutional sales. However, the court determined that such a reversal must follow the formal appellate process, not a retroactive agreement between the parties.
Despite this setback, both parties have signaled their intent to drop remaining appeals and end the litigation. Ripple CEO Brad Garlinghouse previously hailed the SEC’s withdrawal of certain claims as a “resounding victory,” but this ruling highlights the judiciary’s unwillingness to backtrack on securities enforcement.
The court has ordered a joint update by August 15, 2025, to clarify whether the appeal will proceed or be formally withdrawn. The outcome will likely set precedent for future interactions between blockchain firms and U.S. regulators, particularly regarding the legal classification of digital assets in institutional markets.
