Nikolas Sargeant
A federal judge has denied a joint motion from Ripple and the Securities and Exchange Commission seeking to reduce a $125 million civil penalty by 60% and reverse key rulings in their landmark cryptocurrency case. US District Judge Analisa Torres of the Southern District of New York rejected the request in a Thursday filing, stating that the court would not undo earlier rulings that were consistent with federal securities laws.
The denied motion sought an indicative ruling that would have allowed the lower court to modify orders while the case remained under appellate review. Judge Torres emphasized that the original $125 million penalty was imposed because of Ripple's willingness to push legal boundaries, writing that the company showed "a likelihood that it will eventually, if it has not already, cross the line." The judge noted that nothing had fundamentally changed to justify reducing the penalty.
The ruling comes as the high-profile SEC lawsuit against Ripple winds down, with both parties having agreed to drop the case entirely. In March, Ripple CEO Brad Garlinghouse celebrated the SEC's decision to drop its appeal, calling it a "resounding victory" for the company and the broader cryptocurrency industry. The case has been closely watched by the crypto community as a potential precedent-setter for digital asset regulation, particularly amid broader changes to SEC cryptocurrency policy under the current administration.
Under the original settlement terms, $50 million of the $125 million held in escrow would go to the SEC as the discounted penalty, while $75 million would be returned to Ripple. However, Judge Torres made clear that any changes to the penalty structure must go through the congressionally mandated appeals process rather than direct petitions to the lower court. The decision reinforces the finality of the court's earlier rulings on XRP's classification in institutional sales contexts.
