New Procedural Twist in Ripple vs. SEC Lawsuit as Judge Torres Rejects Indicative Ruling Request

New Procedural Twist in Ripple vs. SEC Lawsuit as Judge Torres Rejects Indicative Ruling Request

The legal battle between Ripple Labs (XRP) and the U.S. Securities and Exchange Commission (SEC) has entered a new procedural phase. Judge Analisa Torres has denied the parties' joint request for an "indicative ruling" on procedural grounds. In her order, she stated that if jurisdiction is restored to her court, the motion would still be dismissed due to its procedural inappropriateness.

On May 8, Ripple and the SEC jointly filed for an indicative ruling under Rule 62.1, requesting

1. The lifting of an injunction included in the final judgment, and

2. The release of funds from escrow related to Ripple’s civil penalty totaling $125,035,150—of which $50 million was to be paid to the SEC, with the remainder returning to Ripple.

While the rejection surprised many in the XRP community, the underlying settlement agreement remains intact. The issue, according to Judge Torres, lies purely in procedural missteps. Ripple’s Chief Legal Officer, Stuart Alderoty, reassured stakeholders by stating that "today’s order concerns a procedural issue tied to Ripple’s withdrawal of its appeal and does not impact Ripple’s legal victory." He emphasized that both parties have already reached a settlement and intend to finalize the matter through the appropriate legal channels.

Prominent XRP advocate and legal commentator Bill Morgan explained the situation further on Twitter. He confirmed that both Ripple and the SEC had agreed to settle and had already submitted motions to halt their appeal and cross-appeal processes. The indicative ruling was filed under Rule 62.1 but failed to address Rule 60, which governs the revision of judgments, thereby leading to its rejection.

Should the indicative ruling be granted in future filings, both parties would then submit a motion to the U.S. Court of Appeals for the Second Circuit to temporarily return jurisdiction to Judge Torres. Once jurisdiction is restored, the court can proceed with the motions to lift the injunction and distribute funds accordingly. The parties would then ask the appeals court to formally dismiss their respective appeals, effectively concluding the litigation. Morgan expects both sides to correct the procedural error and refile their joint motion shortly.