‘None of this has changed’: New York judge denies request from SEC and Ripple to lift injunction

A New York judge has denied a request from Ripple and the U.S. Securities and Exchange Commission to lift an injunction, which could have ultimately significantly cut fines previously brought by the agency in the Biden administration.

In an order filed on Thursday in the U.S. District Court for the Southern District of New York, Judge Analisa Torres alluded to the SEC’s previous stance against Ripple involving claims that Ripple would likely continue to violate the law in pressing for an injunction.

“None of this has changed—and the parties hardly pretend that it has. Nevertheless, they now claim that it is in the public interest to cut the Civil Penalty by sixty percent and vacate the permanent injunction entered less than a year ago,” Judge Torres said in the order.

The SEC and Ripple have been asking Judge Torres to allow their joint motion and issue a ruling that the court “dissolve the injunction against Ripple,” allowing $50 million of the $75 million in fines to go to the SEC, with the remaining $ 25 million to be distributed to Ripple.

The dispute between Ripple and the SEC has been going on for years as both parties look to bring an end to the case. In 2020, the SEC accused Ripple of raising $1.3 billion through the sale of XRP, which it said was an unregistered security. Over a year ago, Judge Torres ruled that some of Ripple’s sales, called programmatic, did not violate securities laws because of a blind bid process in place for them. She did, however, rule that other direct sales of the token to institutional investors were securities.

That second part regarding institutional investors meant that Ripple would be fined $125 million.

Later in March, Ripple CEO Brad Garlinghouse said his company’s legal battle with the SEC had effectively ended, and the SEC dropped its appeal. The latest in the case has been focused on the $125 million fine.

In a previous court document, both parties cited the SEC’s sweeping changes in how it views cryptocurrency. Since former SEC Chair Gary Gensler left office in January as the Trump administration rolled in, the agency has dropped several investigations and charges against large crypto firms. The agency also rolled out a crypto task force, which has held several roundtables as it works to create a regulatory framework.

The SEC can decide to change course following an enforcement action, Judge Torres said on Thursday.

“But 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 said. “For that, the parties must show exceptional circumstances that outweigh the public interest or the administration of justice. They have not come close to doing so here.”

Judge Torres also said Ripple and the SEC could withdraw their appeals or take an appeal.

Ripple and the SEC did not immediately respond to a request for comment.

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