Ripple’s fine in SEC case shouldn’t be reduced, says judge
In a surprising court filing this morning, Judge Analisa Torres has denied a joint request by the Securities and Exchange Commission (SEC) and Ripple to reduce the fine of Ripple’s settlement and eliminate the company’s court-imposed injunction.
With document 989 of case 1:20-cv-10832-AT-SN in the US District Court, Southern District of New York, their joint motion for an indicative ruling has ended unsuccessfully for the second time.
In a five-page letter, the judge explained her reasoning. First of all, she noted, the lawsuit has already passed the settlement stage. The main event of SEC v. Ripple is substantially over.
In March 2024, the SEC dropped its lawsuit by requesting Ripple pay a fine of $1 billion and be enjoined against any future Section 5 violation of the Securities Act of 1933.
The US District Court, Southern District of New York, mostly agreed with the SEC, although it lowered the dollar amount substantially.
Specifically, on August 7, 2024, the final judgment of SEC v. Ripple permanently enjoined Ripple from violating Section 5 and fined a civil penalty of $125,035,150 or 87.5% less than the SEC’s initial request.
Gary Gensler’s original complaint against Ripple
In January 2025, Gary Gensler filed his last court document as chairman of the SEC. Lamenting what he viewed as a massive mistake by Torres and appealing to the supersedingly powerful Second Circuit, he explained why he and other commissioners still believed that Ripple had illegally sold XRP tokens.
Gensler had actually carried this case forward from his predecessor, SEC Chairman Jay Clayton, and begrudged the courts for not ruling fully in the SEC’s favor for so many years since Clayton led its charge in December 2020.
Nonetheless, Donald Trump’s entrance to the White House and his repeated promises to fire Gensler on “day one” encouraged Gensler to resign ahead of schedule. By Inauguration Day, Gensler had stepped down.
Read more: Ripple played Trump to pump XRP — now he’s cutting ties
The Mark Uyeda-led SEC soon moved to drop the Gensler-led Second Circuit appeal altogether. Indeed, on May 8, 2025, the SEC and Ripple co-signed an agreement to settle both the Southern District of New York lawsuit and its Second Circuit appeal.
However — and this detail was underreported by the media — that May 8 agreement stipulated that the settlement would only take effect if Torres agreed to strike down the injunction against Ripple and reduce the penalty by 60%.
In today’s court filing, Torres has declined to do just that.
No exceptional circumstance for reducing Ripple’s penalty
In fact, Torres has already declined to eliminate the injunction and reduce the penalty. This is the parties’ second failed request to eliminate the permanent injunction and reduce Ripple’s civil penalty.
Her courtroom has already declined an earlier request because the SEC and Ripple didn’t identify or apply proper legal standards, Torres reminded them today.
In her denial this morning, Torres reiterated that her August 7, 2024, final judgment should persist unless there’s an “exceptional circumstance” that “outweighs considerations of the public interest or the administration of justice.”
Torres thinks that the parties’ joint motion for an indicative ruling has failed to demonstrate any such exceptional circumstance.
In Torres’ view, she imposed Ripple’s injunction and $125 million civil penalty because she agreed with the Gensler-led SEC’s accusation that “Ripple’s willingness to push the boundaries” of the law and “a likelihood that it will eventually (if it has not already) cross the line.”
Torres concluded scathingly, “None of this has changed — and the parties hardly pretend that it has.”
In denying the request, Torres finished her opinion succinctly. “The parties must show exceptional circumstances that outweigh the public interest or the administration of justice. They have not come close to doing so here.”
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