Top Legal Expert Breaks Down Ripple-SEC Latest Setback, Raises Six Key Questions

• Judge Analisa Torres denied Ripple-SEC’s motion to modify their settlement, citing procedural flaws under Rule 60.
• The denial leaves Ripple’s $125 million penalty and the ban on institutional XRP sales.
• Legal expert Bill Morgan raised six unresolved questions.

The legal entanglement between Ripple and the U.S. SEC took a new turn after Judge Analisa Torres denied a joint motion to modify the final judgment. This has raised serious questions about the future of their settlement. Meanwhile, Australian lawyer Bill Morgan has outlined six critical legal issues facing both parties.

Judge Torres Rejects Motion

Notably, on May 8, Ripple and the SEC jointly filed a motion seeking to amend key terms of a previously agreed-upon settlement. This included lifting a permanent injunction on Ripple’s institutional XRP sales and reducing a $125 million civil penalty to $50 million.

However, Judge Torres dismissed the motion on May 15, stating it failed to meet procedural standards under Rule 60 of the Federal Rules of Civil Procedure, which governs relief from final judgments. The motion had instead relied on Rule 62.1, which allows a judge to issue an indicative ruling when a case is under appeal.

Judge Torres made it clear that the motion would still be denied even if jurisdiction were restored from the appellate court.

Related: XRP Case Setback: Ripple-SEC Joint Motion Fails to Clear Court’s Procedural Bar

Bill Morgan Raises Six Legal Questions

Reacting to the development, attorney Morgan posted a detailed legal analysis on X. He identified six unanswered questions that now cloud the path forward for Ripple and the SEC. His reflections center on the validity of the settlement, procedural compliance, and the SEC’s internal governance. Among the most pressing concerns:

• Can the parties now refile under Rule 60, and would doing so require a fresh vote by the SEC’s five commissioners?

• Does the failure to obtain an indicative ruling nullify the settlement, or can it still be upheld based on the original recitals?

• Was the Rule 62.1 strategy a procedural misstep or a deliberate attempt to avoid the higher threshold required under Rule 60?

Morgan suggests it’s “hard to believe” that experienced legal teams from both Ripple and the SEC would overlook such a critical procedural rule. This implies the use of Rule 62.1 may have been a calculated move to bypass the difficulty of proving “exceptional circumstances” under Rule 60.

Ripple CLO Reassures XRP Community

The failure of the joint motion means the $125 million penalty remains in place, and the ban on institutional XRP sales still stands, at least for now. 

Related: Ripple Can Now Access $400 Billion UAE Trade Zone With New DFSA Payment License

Meanwhile, Ripple’s Chief Legal Officer, Stuart Alderoty, clarified that Judge Torres’ denial is procedural and does not affect Ripple’s prior legal victories, including the July 2023 ruling that XRP is not a security. He emphasized that Ripple and the SEC remain aligned in seeking resolution and plan to refile under the appropriate legal framework.