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Judge says both sides cannot escape permanent injunction

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SEC proposed reducing fine over XRP token sales

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Ripple has not decided next legal move

By Jonathan Stempel

NEW YORK, June 26 (Reuters) - A federal judge on

Thursday rejected an unusual joint motion by Ripple Labs and the

U.S. Securities and Exchange Commission to endorse the

cryptocurrency company's reduced $50 million fine to settle a

civil lawsuit over the sale of unregistered securities.

U.S. District Judge Analisa Torres in Manhattan chastised

both sides for claiming that their settlement in March should

excuse Ripple from honoring her permanent injunction against

violating the law.

Ripple's chief legal officer Stuart Alderoty posted on X

that the company has not decided its next legal steps. An SEC

spokesman had no immediate comment.

The case concerned sales of the XRP token, and has been

one of the SEC's highest-profile cryptocurrency cases.

In July 2023, Torres ruled that while XRP sold by Ripple on

public exchanges did not meet the legal definition of a

security, $728 million of XRP sales to institutional investors

should have complied with securities laws.

Ripple and the SEC appealed, but agreed to settle if Torres

set aside her injunction and approved lowering the $125 million

fine she imposed last August.

The SEC has been easing oversight of cryptocurrencies, and

the judge agreed it can change course on enforcement cases.

Torres said, however, that both sides had "not come close"

to showing that exceptional circumstances outweighing the public

interest and administration of justice justified the settlement.

"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," she wrote.

"Accordingly, if jurisdiction were restored to this court,

the court would deny the parties' request to vacate the

injunction and reduce the civil penalty," she added.

Torres said the SEC and Ripple remain free to withdraw their

appeals, or appeal her injunction.

XRP is the fourth-largest cryptocurrency by market value,

trailing bitcoin, Ethereum and Tether, the market service

CoinMarketCap said on Thursday.

Since Donald Trump began his second term as U.S. president,

the SEC has ended civil lawsuits against crypto exchanges

Binance, Coinbase and Kraken.

The case is SEC v Ripple Labs Inc, U.S. District Court,

Southern District of New York, No. 20-10832.