- SEC and Ripple jointly request the court to dissolve injunction and release the $125M in escrow.
- Proposed settlement allocates $50M to the SEC, with the remaining funds returned to Ripple.
- Court approval is required as judgment modification is a “necessary condition of settlement.”
The Securities and Exchange Commission and Ripple Labs have submitted a joint motion to Manhattan District Court Judge Analisa Torres requesting the dissolution of the injunction in their ongoing legal case and release of $125 million in civil penalties currently held in escrow. The proposed settlement would allocate $50 million to the SEC while returning the remaining funds to Ripple.
The June 12, 2025, filing addresses the case SEC v. Ripple Labs Inc., seeking court approval to modify the Final Judgment entered against Ripple. Both parties argue that exceptional circumstances warrant the requested changes. They also cited precedent from cases where judgment modifications were necessary to facilitate settlements that would eliminate pending appeals and provide relief as a “necessary condition of settlement.”
Court Previously Denied Similar Request Over Procedural Issues
Judge Torres previously denied the parties’ May 8, 2025, Rule 62.1 request and determined that the filing did not address whether “exceptional circumstances” warranted the requested modification of the Final Judgment pursuant to Rule 60(b). The motion currently seeks to satisfy this requirement by offering further legal support for the provisions of the settlement proposed.
The case’s history dates back to a series of court orders spanning nearly two years. On July 13, 2023, the court issued a Summary Judgment Order partially granting and denying cross-motions for summary judgment. Subsequently, on August 7, 2024, the court entered Final Judgment against Ripple in the shape of an injunction and a civil penalty of $125,035,150.
The parties cite Second Circuit rulings, such as those in Microsoft v. Baker and Major League Baseball, which permit modification of final judgments in exceptional circumstances, specifically to facilitate settlements that resolve pending appeals. This legal foundation is the basis for their joint motion.
Bill Morgan Weighs In On The Whole Situation
Attorney Bill Morgan underscores the significance of the motion and states that if Judge Torres disallows the exceptional circumstances argument, the settlement agreement becomes unenforceable because judgment modification is an essential requirement. Disapproval of the motion would make the settlement invalid and force the continuation of cross-appeals and appeals.
The existing escrow system depends on a September 4, 2024, Order Staying Enforcement of Monetary Portion of Final Judgment, in which Ripple was ordered to place 111% of the amount of the civil penalty in an interest-bearing account until the appeals are determined. This system has the effect of holding back funds while appeals are ongoing.
The settlement agreement would reduce Ripple’s original $125 million penalty to $50 million and lift the injunction that hinders the company’s business operations. For the SEC, the deal offers prompt recoveries of funds without endangering the overturning of the lower court judgments by the appeals court.
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