Top legal experts break down the latest setback in Ripple Sec and raise six key questions

The legal entanglement between Ripple and the US SEC has undergone a new shift after Judge Annalisa Torres refused a joint motion to amend the final decision. This raised serious questions about the future of their settlement. Meanwhile, Australian lawyer Bill Morgan has outlined six important legal issues facing both parties.

Judge Torres refuses to move

In particular, on May 8, Ripple and the SEC jointly submitted a motion to amend the important terms of the previously agreed settlement. This included lifting a permanent injunction over Ripple’s institutional XRP sales and reducing the $125 million civil penalty to $50 million.

However, Judge Torres dismissed the motion on May 15, saying it failed to meet the procedural standards under Rule 60 of federal civil proceedings that govern relief from the final decision. Instead, the claim relied on Rule 62.1, allowing a judge to issue an indication judgment if the case is appealed.

Judge Torres made it clear that even if jurisdiction is restored from the court of lawsuits, the claim will still be denied.

Related: XRP Case Setback: Ripple Sec Joint Movement Cannot Clear Court Procedural Bar

Bill Morgan raises six legal questions

In response to the development, Attorney Morgan posted a detailed legal analysis to X. He identified six unanswered questions that clouded the Ripple and SEC paths. His reflections focus on the effectiveness of settlement, procedural compliance, and the SEC’s internal governance. Among the most pressing concerns:

• Can a party currently modify it under Rule 60?

• Will the settlement be invalidated if directive control fails, or could it be supported based on the original recital?

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

Morgan suggests that it is “hard to believe” for legal teams who have experienced both Ripple and the SEC to overlook such important procedural rules. This means that the use of Rule 62.1 could have been a calculated move to bypass the difficulty of proving “exceptional circumstances” under Rule 60.

Ripple Clo will reassure the XRP community

The failure of the joint move has maintained a $125 million penalty for at least now, with a ban on XRP sales at the facility still in existence.

Related: Ripple now has access to the $400 billion UAE trade zone with a new DFSA payment license

Meanwhile, Ripple’s Chief Legal Officer, Stuart Aldeoty, made it clear that Judge Torres’ rejection was procedural and would not affect Ripple’s previous legal victory, including the July 2023 ruling that XRP was not security. He emphasized that Ripple and the SEC will seek a resolution and remain in line with plans to amend the issue under an appropriate legal framework.