XRP Price Drops Sharply After Judge Analisa Torres Rejects a Request From Both Parties

XRP price dropped sharply after a key decision in the ongoing lawsuit between Ripple Labs and the U.S. Securities and Exchange Commission (SEC).

Key Insights:

* Judge Analisa Torres rejected a request from both parties to remove an earlier court order and lower Ripple’s fine. The denial came on procedural grounds.

* The ruling immediately impacted the XRP price, which dropped by almost 5% an hour later.

* Both parties are expected to refile their motion using the correct legal rule.

The U.S. judge presiding over the case between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has denied a request from both parties to vacate or modify her prior judgment.

In her ruling on Monday, Judge Analisa Torres said the motion to alter or amend the judgment was procedurally improper. The parties failed to fully engage with Federal Rule of Civil Procedure 60, which governs motions for relief from a final judgment.

The ruling came just an hour after the price of XRP fell by nearly 5% following a rapid recovery in recent days.

The court explained that the motion sought to vacate major findings of fact and law, such as the determination that Ripple sold unregistered securities to institutional investors. Such requests require a showing of exceptional circumstances, which had not been presented.

“The motions do not identify any new evidence that could not have been discovered with due diligence in time for trial or any errors in the judgment,” Judge Torres added.

Earlier this week, Judge Torres denied a request from both parties to modify her prior judgment in order to reduce the penalty imposed on Ripple. The judge pointed out that the parties failed to cite the correct legal rule in their motion.

Both parties took a faster route to adjust the judgment and did not fully meet the court’s legal standards, said Rispoli. Now, they have to be mindful of the court’s full standards.

“They will refile it under the correct rule. Both parties are fully aligned on settling this case and will work together to address the court’s concerns,” Rispoli added.

The ruling comes after a recent report by Bloomberg claimed that the SEC and Ripple reached an agreement in principle to settle the lawsuit.

The SEC's lawsuit, which began in December 2020, focused on whether Ripple's sales of XRP to institutional investors over a 12-year period constituted the sale of unregistered securities. The case also examined whether the SEC's actions in policing the cryptocurrency market were an abuse of process.

Judge Torres ruled in July that XRP sales to retail buyers were not illegal, but the sales to institutional investors did violate U.S. securities law. The judge also said the SEC's conduct had been "abused" by the agency.

Following the ruling, both parties filed a joint motion to modify the judgment by dissolving the injunction against Ripple and reducing the penalty to $50 million. However, Judge Torres said the request to modify the judgment should have been filed under Rule 60 of the Federal Rules of Civil Procedure.

The parties also failed to meet the requirements of Rule 60, such as showing that the judgment varied substantially from the original intent of the parties or that it would create unjust, anomalous, and inequitable results.

"Accordingly, the motions are procedurally improper and will be denied," Judge Torres concluded.