Analisa Torres, the Manhattan federal district judge presiding over the Securities and Exchange Commission's lawsuit against Ripple, has denied a request from Ripple and the SEC's new leadership to eliminate the restrictions and reduce the civil penalty the court earlier imposed on Ripple.
In the SEC's original complaint against Ripple in 2020, the commission said the company had violated the Securities Act of 1933 by selling an unregistered security, XRP, and thereby depriving XRP buyers of information that would help them make informed investment decisions. The agency also said the company and its leaders had enriched themselves with sales of XRP they had gifted to themselves. (Brad Garlinghouse and Chris Larsen, the executives cited in the complaint, never addressed the issue of their own financial gains from XRP in their court filings.)
At that time, several banks, including PNC, Bank of America and Banco Santander,
In July 2023, the court agreed in part with the SEC, finding that Ripple offered XRP as a security without registration, in violation of the Securities Act, when Ripple sold XRP to certain institutional buyers, but not in the case of consumer buyers.
In March 2024, the SEC asked the court to permanently prohibit Ripple from violating the Securities Act and require Ripple to pay a penalty of nearly $1 billion, representing the money Ripple made from its illegal offer and sale of XRP.
Again, the court agreed in part with the SEC and in August 2024
In May 2025, the SEC and Ripple
In Torres' response to that request this week, she said the Supreme Court has emphasized that the judgment of a court is "not merely the property of private litigants. It is a final judgment that belongs to the legal community as a whole and should stand unless a court concludes that the public interest would be served by a vacatur."
Torres pointed out that the SEC had made a strong case that Ripple's misconduct was reckless and likely to continue. "Ripple's conduct was so egregious, according to the SEC, that the Agency fully expected Ripple to keep hidden the information that Section 5 requires be disclosed for the benefit of investors," she wrote. "In other words, all signs pointed to the likelihood that, without an injunction, Ripple would continue to disregard the laws of Congress in a manner that would hurt investors.
"As the Agency put it, 'if companies can raise money with the ease that Ripple did — by simply receiving billions of units of computer code that cost little to nothing to create and then turning it into billions of dollars, without registering these transactions with the SEC and providing the requisite disclosures — the legal structure underpinning our financial markets will be jeopardized,'" Torres wrote.
She also noted that the probability that Ripple would continue violating federal securities laws "has not changed, nor do the parties claim that it has."
Observers noted the unusual circumstance of the SEC fighting on the opposite side of a case it originally brought to court.
"It's going to be interesting to see how the SEC will argue against itself" going forward, Benjamin Edwards, law professor at the University of Nevada, wrote in a blog. "In April, the SEC and Ripple agreed to hold the appeal in abeyance. Now that this run at the SDNY has fizzled, it's going to be interesting to see what they and the 2nd Circuit do."
Torres' latest ruling also demonstrates courts' ability to remain independent of changes in government.
"The SEC can change its view of the law but that does not mean Judge Torres will change hers," said Kayvan Sadeghi, partner and co-chair of the fintech and crypto assets practice at Jenner & Block. "A good reminder that the SEC does not write the law, and a call to action for those seeking clarity from Congress."
