The price of XRP dipped sharply following a pivotal legal development in the long-running Ripple-SEC lawsuit. On May 15, 2025, Judge Analisa Torres rejected a joint motion filed by Ripple Labs and the U.S. Securities and Exchange Commission (SEC) to modify the final judgment from August 2024. The court deemed the motion “procedurally improper,” casting uncertainty over the settlement timeline and triggering a swift market reaction.
XRP’s value dropped over 5% within an hour, falling from $2.50 to a low of $2.40. This movement underscores how legal clarity—or the lack thereof—continues to influence investor sentiment in the crypto markets.
Why Judge Torres Rejected the Settlement Motion
Judge Torres ruled that the joint request to vacate key portions of the August 2024 judgment failed to comply with Federal Rule of Civil Procedure 60, which governs motions for relief from final judgments. The court emphasized that altering such rulings requires a showing of “exceptional circumstances,” a threshold not met by the parties.
“Relief from judgment…is granted only upon a showing of exceptional circumstances.” – Judge Analisa Torres
The original judgment had determined that Ripple violated securities laws by selling XRP to institutional investors without proper registration. While sales to retail investors were deemed non-securities transactions, the institutional sales formed the basis of the SEC’s case and resulted in a $125 million penalty.
The joint motion sought to reduce this fine to $50 million and dissolve the injunction on institutional XRP sales. However, because it did not follow proper procedural channels, the court denied it—without prejudice—allowing Ripple and the SEC to refile correctly.
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Ripple and SEC Prepare to Refile Under Rule 60
Despite the setback, both Ripple and the SEC remain aligned on resolving the case. Legal experts, including attorney Fred Rispoli, confirm that the parties will now refile under Rule 60(b), which allows courts to grant relief from final judgments under specific conditions such as mistake, fraud, or other extraordinary factors.
Ripple’s Chief Legal Officer, Stuart Alderoty, reaffirmed confidence in the process:
“Ripple and the SEC are fully in agreement to resolve this case and will revisit this issue with the Court.”
This cooperation signals a continued effort to bring closure to a case that has spanned over four years. Analysts believe the refiling could happen within weeks, especially given the mutual interest in finalizing terms that reflect recent legal precedents and market realities.
Market Reaction: XRP Tests Critical Support at $2.40
The immediate market impact was clear. XRP’s price declined from $2.50 to $2.40, marking one of its steeper intraday drops in recent months. According to Coinglass data:
- Open interest fell by 6% to $5.08 billion
- Long liquidations exceeded $20 million in 24 hours
Technically, $2.40 has emerged as a key support level. A sustained break below this point could open the door to further downside, with potential targets near $2.19 and possibly as low as $1.79 if broader market conditions weaken.
Earlier in the week, XRP had tested resistance at $2.70 but was rejected—a sign that upward momentum remains constrained by regulatory uncertainty. Traders are now watching volume patterns and order book depth closely to gauge whether institutional interest returns once legal clarity improves.
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What’s Next for the Ripple vs. SEC Lawsuit?
The path forward involves several legal steps:
- Refile under Rule 60: Ripple and the SEC must submit a new motion that meets procedural requirements.
- Seek Appellate Permission: Since appeals are still pending, the parties may need approval from the Court of Appeals to amend their settlement.
- Court Review: Judge Torres will assess whether the revised motion satisfies fairness, reasonableness, and public interest standards.
Legal analyst Bill Morgan noted that if approved, the updated settlement would likely include:
- Reduction of the civil penalty to $50 million
- Dissolution of the injunction on institutional XRP sales
- Mutual dismissal of pending appeals
These changes would represent a significant win for Ripple, reinforcing its argument that XRP is not inherently a security and that institutional sales can comply with regulations under proper frameworks.
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Frequently Asked Questions (FAQ)
Q: Why did XRP price drop after the court decision?
A: The price fell due to renewed uncertainty after Judge Torres rejected the settlement motion. Investors reacted negatively to the delay in resolving the long-standing legal dispute.
Q: Can Ripple and the SEC still settle the case?
A: Yes. The court’s rejection was procedural, not substantive. Both parties can refile under Federal Rule 60 and request relief from judgment with proper documentation.
Q: Does this ruling affect XRP’s status as a security?
A: No major change. The ruling doesn’t alter Judge Torres’ prior decision that retail XRP sales are not securities transactions. The focus remains on institutional sales.
Q: What happens if the new motion is denied again?
A: Further delays could prolong appeals and maintain regulatory ambiguity. However, given both parties’ alignment, denial is considered unlikely if procedural rules are followed.
Q: How might this affect other crypto projects facing SEC actions?
A: It reinforces that settlements require strict adherence to legal procedure. Other firms may take caution when negotiating with regulators to avoid similar setbacks.
Q: Is now a good time to buy XRP?
A: That depends on risk tolerance. Some traders see dips as buying opportunities ahead of potential resolution, while others wait for clearer regulatory signals.
Conclusion
While Judge Torres’ decision introduces a temporary delay, it does not derail the broader trajectory toward resolution in the Ripple-SEC lawsuit. The procedural nature of the rejection means a revised settlement is likely forthcoming—and potentially closer than ever.
For investors, this moment highlights the deep interconnection between legal progress and asset valuation in the crypto ecosystem. As Ripple and the SEC prepare to refile, all eyes will remain on Washington D.C. courts—and on XRP’s ability to hold critical technical support.
With regulatory clarity on the horizon and market dynamics shifting rapidly, staying informed is essential for anyone involved in digital assets.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency investments are subject to high market risk. Always conduct your own research before making any trading decisions.