December 7, 2023

After nearly five years, Ripple’s legal fight against the SEC remains stalled at a federal judge’s latest hurdle. A Brooklyn judge rejected Ripple’s bid to reduce a permanent injunction and its associated $50 million penalty earlier imposed by the court, finding the proposal legally unsound and contrary to the public interest.

Judge Dismisses Settlement Proposal

Judge Analisa Torres issued a ruling denying a joint motion to set aside parts of the court’s December 2022 final judgment. The aggrieved parties had sought to “quiet the litigation,” which they argued should be modified due to past SEC policy shifts and the potential for a private settlement.

Though this represented a significant reduction from the previous $125 million fine and drastically lower than the SEC’s initial $1.3 billion request, Torres found merit in neither of the parties’ justifications. She stressed that “nothing substantive has changed to warrant a reversal of a decision the court spent years crafting.”

The order stated the parties must demonstrate “exceptional circumstances that outweigh the public interest or the administration of justice,” specifying they had “not come close to doing so here.”

Industry Reactions

The decision drew sharp criticism from a former SEC official. Coren Frayer, a former senior adviser in the agency, described the SEC’s reversal of course and the resulting decision Thursday as a direct consequence of its “hubris, incompetence, and crypto fealty,” characterizing it as “absolute malpractice.”

The outcome was also noted by legal experts. Ripple’s chief legal officer, Stuart Alderoty, cast the result as another hurdle to overcome via ongoing appeals, suggesting the ball is back in the company’s court with a specific appeal challenge.

Crypto Market Movers

Although restrictions were lifted from publicly discussing the case immediately following the judge’s order, a brief discussion emerged noting the immediate market impact. Tech-focused cryptocurrency Ethereum briefly saw slight selling pressure of around 0.2%. Concurrently, broader sentiment was partly driven by geopolitical anticipation following comments by an official about crypto-backed mortgages, while established players like Nvidia surged toward new all-time highs. Some alternative coins experienced decreased sentiment. Overall cryptocurrency sentiment appeared cautious, tracking reactions to macro factors and anticipating potential narrative shifts from the persistent legal case.