XRP falls as court denies $50M Ripple-SEC settlement
Ripple-SEC deal rejected, XRP dips
XRP, the digital asset associated with Ripple Labs, fell 4.5 percent on Friday after a U.S. federal judge rejected a $50 million settlement proposal between Ripple and the Securities and Exchange Commission (SEC).
Judge Analisa Torres denied the motion due to a procedural misstep, stating that the parties failed to satisfy the legal criteria for modifying a prior court ruling.
Key takeaways
- XRP price dipped after judge rejected Ripple-SEC $50M settlement plan.
- Judge cited procedural failure to comply with Rule 60 on altering final court decisions.
- Original $125M penalty remains, as does the block on certain XRP sales.
- Ripple and SEC remain aligned, but must revise and refile motion to proceed.
Legal hurdle slows Ripple-SEC resolution
The motion, jointly filed by Ripple and the SEC on May 8, 2025, aimed to reduce Ripple’s financial penalty from $125 million to $50 million. However, Judge Torres emphasized that the request did not comply with Rule 60 of the Federal Rules of Civil Procedure, which governs the revision of final judgments. As a result, the attempt to fast-track the settlement hit a significant roadblock.
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The SEC originally filed suit against Ripple in 2020, alleging the company sold XRP as an unregistered security. In 2024, a judgment required Ripple to pay a $125 million penalty. In a bid to resolve the case, both parties agreed to a revised settlement earlier this year and requested court approval to pause appeals and finalize the deal. The court's rejection, however, means that the path to settlement is temporarily stalled.
Ripple CLO Stuart Alderoty stressed that the court's decision was based purely on legal formalities. “Nothing in today’s order changes Ripple’s wins (i.e. XRP is not a security, etc),” he said, reaffirming that both parties intend to revisit the issue.
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Attorney Bill Morgan explained the intended sequence: Ripple and the SEC signed their settlement agreement, paused active appeals, and jointly asked the court for an indicative ruling to support their deal.
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What’s next for Ripple?
The legal uncertainty sparked immediate market repercussions. XRP fell approximately 4.5% in 24 hours, while open interest in XRP derivatives fell 9.4%, reaching $4.93 billion. Additionally, over $21 million in long positions were liquidated as traders responded to the court’s rejection and the fresh uncertainty it introduced.
XRP price analysis (May 2025) Source: TradingView
With this latest ruling, Ripple and the SEC must decide whether to refile their request with proper legal justification or pursue an alternative route to close the multi-year legal battle. Legal experts suggest the procedural error can be corrected, but the delay adds uncertainty to Ripple’s legal and regulatory outlook.
We also informed you earlier that twelve XRP ETF filings await SEC decision in 2025.
