Judge Rejects SEC and Ripple’s Joint Bid to Reduce Fine and Vacate Injunction

In a striking rebuke to both a federal agency and a prominent digital asset firm, U.S. District Judge Analisa Torres has rejected a joint motion by the Securities and Exchange Commission (SEC) and Ripple Labs to finalize a reduced civil penalty and vacate a previously imposed injunction in their high-profile enforcement battle. The ruling underscores the limits of private settlement power in the face of final judicial determinations and reinforces the judiciary’s role in upholding statutory mandates — especially in cases involving violations of the federal securities laws.

Background: Ripple's Legal Saga

The SEC initially sued Ripple Labs in December 2020, alleging that the company conducted unregistered securities offerings through its sale of XRP tokens. The litigation quickly became a lightning rod for the broader crypto industry, testing the boundaries of how digital assets are treated under U.S. securities laws. In 2023, Judge Torres issued a partial ruling, finding that Ripple's institutional sales of XRP violated the Securities Act, while other programmatic sales did not. She issued a permanent injunction and imposed a substantial financial penalty.

In March 2025, Ripple and the SEC sought to resolve the remaining aspects of the case with a proposed reduction in Ripple’s penalty to $50 million and a request that the injunction be lifted.

Judicial Rejection: “No One Can Bargain Away a Final Judgment”

In a decision issued Thursday, Judge Torres firmly rejected the joint request. In unusually sharp language for a settlement posture, she wrote:

“The parties do not have the authority to agree not to be bound by a court’s final judgment that a party violated an Act of Congress in such a manner that a permanent injunction and a civil penalty were necessary to prevent that party from violating the law again.”

Judge Torres emphasized that the injunction and penalty were imposed based on a final determination that Ripple violated federal securities laws, and that it would be inappropriate to revisit that judgment without a valid legal basis. Her opinion reinforces that once a court has issued a final judgment — particularly one involving public interest and statutory enforcement — neither party can unilaterally undo it through agreement.

Implications for Ripple, the SEC, and Crypto Markets

This ruling throws a wrench into the SEC and Ripple’s attempt to tie a bow on a multi-year legal battle. Judge Torres noted that the parties may withdraw their appeals or proceed with appellate review of the injunction — but absent jurisdiction being restored to the district court, she would decline to modify her ruling.

From a broader enforcement perspective, this decision underscores several key themes:

• Judicial Finality: Consent by both parties does not override a court’s duty to enforce its prior determinations, especially in public enforcement matters involving an Act of Congress.

• Limits of Settlement Autonomy: Even the SEC cannot “contract around” final judicial findings — the court retains discretion and authority over how and whether those findings may be amended.

• Enforcement Integrity: The judiciary is signaling a firm stance on the enforcement of statutory remedies, even in the face of negotiated compromise.

Anderson P.C. Insight

This decision is a cautionary tale for crypto companies and regulators alike: settlement is not a guaranteed escape hatch from judicial scrutiny, especially once a final judgment has been rendered. At Anderson P.C., we continue to monitor developments at the intersection of enforcement discretion and judicial authority — and advise clients to treat injunctions, penalties, and court orders with the gravity they deserve.

For questions about how this decision may impact your compliance strategy, regulatory exposure, or litigation risk, reach out to our Securities Enforcement practice team.

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