Ruling

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The US Securities and Exchange Commission and Ripple Labs Inc. have returned to Judge Analisa Torres with an amplified request that could bring their four-and-a-half-year XRP lawsuit to an abrupt close. In a five-page joint letter filed on 12 June 2025 (Doc. 987), the litigants ask the Southern District of New York for an “indicative ruling” that would dissolve the injunction imposed on Ripple last August and release the lion’s share of the $125 million civil-penalty escrow.

The End Of The XRP Lawsuit?

The motion, brought under Federal Rules of Civil Procedure 62.1 and 60(b)(6), comes after Judge Torres rejected an earlier, near-identical application in May for failing to show the “exceptional circumstances” required to modify a final judgment. The renewed filing seeks to fill that gap. “Exceptional circumstances warrant the requested modification of the Final Judgment,” the parties write, identifying settlement efficiency, conservation of judicial resources and the SEC’s evolving crypto-enforcement priorities as the decisive factors.

Under the proposed arrangement, Ripple would pay $50 million to the SEC “in full satisfaction” of the penalty, while approximately $75 million plus accrued interest would revert to the company. In addition, the permanent injunction—entered on 7 August 2024 and premised on violations of Section 5 of the Securities Act—would be lifted. The parties emphasize that their compromise is a “necessary condition of settlement” and promise, if the indicative ruling issues, to petition the Court of Appeals for a limited remand so the district court can enter the relief and the appeals can be dismissed.

The letter recites a procedural history that began with Judge Torres’s landmark 13 July 2023 summary-judgment order. That decision split the SEC’s case, holding that Ripple’s institutional XRP sales ran afoul of federal securities law while ruling that programmatic sales on crypto exchanges did not constitute offerings of investment contracts. After the SEC’s remaining claims against Ripple executives Brad Garlinghouse and Chris Larsen were voluntarily dismissed, the court, on 7 August 2024, imposed the $125 million civil penalty and enjoined Ripple from further unregistered XRP institutional distributions.

Both sides noticed appeals in October 2024, but those proceedings were placed in abeyance on 16 April 2025 to allow time for a settlement‐in-principle. The joint request for an indicative ruling followed on 8 May 2025 but was denied a week later because the parties had not articulated why modification met the Rule 60(b)(6) “exceptional circumstances” threshold.

The new submission leans heavily on Second Circuit authority—Microsoft Corp. v. Bristol Tech., Major League Baseball Props. v. Pacific Trading Cards—which recognizes that a court may modify or vacate its own judgment when doing so is indispensable to settlement and promotes judicial economy. “Termination of the appeals … would be consistent with these dismissals by joint stipulation” the SEC has recently executed in other crypto-asset cases, the letter notes, pointing to the agency’s post-January 2025 policy shift under Acting Chair Mark Uyeda and his newly formed Crypto Task Force.

The parties also argue that public interests are not harmed because Judge Torres’s substantive summary-judgment ruling will “remain untouched and will continue to bind the parties.” The requested relief, they contend, affects only remedial provisions—penalty size and injunctive scope—whose adjustment “reflects the unique facts of this case” and therefore carries “relatively small” precedential weight.

What Comes Next

Judge Torres now must decide whether these articulated factors meet the high bar of Rule 60(b)(6). Should she signal her willingness to grant the relief in the XRP lawsuit, the securities regulator and the San Francisco-based fintech will ask the Second Circuit to remand the case for entry of an amended judgment, after which both the SEC’s appeal (No. 24-2648) and Ripple’s cross-appeal (No. 24-2705) would be voluntarily dismissed.

If the court demurs, the litigation returns to the appellate track, extending a saga that began when the SEC sued Ripple on 22 December 2020. For now, the fate of the injunction and $75 million in escrowed funds—and, by extension, Ripple’s immediate regulatory posture—rests on whether Judge Torres accepts that, five years on, the “exceptional circumstances” standard has finally been met.

At press time, XRP traded at $2.11.

XRP finds support at the 200-day EMA, 1-day chart | Source: XRPUSDT on TradingView.com

Featured image created with DALL.E, chart from TradingView.com

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