Ripple's legal chief says rejection of XRP settlement does not threaten Ripple's win

Judge Analisa Torres of the US District Court for the Southern District of New York rejected a joint Ripple-SEC motion seeking an indicative ruling

Judge Analisa Torres of the US District Court for the Southern District of New York has rejected a joint motion by the Securities and Exchange Commission (SEC) and Ripple to grant an indicative ruling on their proposed settlement of the case.

The ruling, which was filed on Monday, comes after the SEC and Ripple agreed to settle the case in May, aiming to resolve the regulator’s claims that Ripple sold XRP as unregistered securities.

Rejecting the request as "procedurally improper," Judge Torres said the parties failed to file the correct procedural motion to support the proposed settlement.

"By styling their motion as one for 'settlement approval,' the parties fail to address the heavy burden they must overcome to vacate the injunction and substantially reduce the civil penalty," Judge Torres wrote in the ruling, seen byDecrypt.

The SEC and Ripple agreed to lower the court’s $125 million (R1.9 billion) in stated penalties to an undisclosed sum, and the regulator’s request for a permanent injunction against Ripple.

The parties also agreed to cooperate in filing a motion to modify or vacate the injunction and to substantially reduce the civil penalty.

The president’s executive order on digital assets, which was announced in December 2022, requests the heads of relevant federal agencies to cooperate in identifying the best ways to use blockchain and cryptocurrency in the US.

It also directs the administration to prioritize the development of a national stablecoin and to create a framework for the use of crypto in financial services.

Community members ask for explanation

Many in the community were unhappy with the lack of specifics from Ripple.

"First, in a recent post about this case, you said you would not be making any more X posts because the case was closed," one XRP observer responded to Alderoty in the X thread.

"Second, I don’t think it’s enough to just say that it’s procedural. I think further explanation of what went wrong in the filing is needed," one XRP observer wrote in an X thread,

"Let’s remember that both he and Brad said the case was over, and it still isn’t; they’re cheating us a little," another user speculated.

The news comes shortly after online reports suggested that US President Donald Trump was allegedly manipulated by a Ripple-linked lobbyist into announcing the XRP token would be part of his plans for a national cryptocurrency reserve.

Many in the Bitcoin community have been slamming Ripple for advocating for a multi-coin strategic reserve, instead of a Bitcoin-only reserve.