XRP prices experienced a sharp decline of 22% after U.S. District Judge Analisa Torres rejected the joint motion between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) to settle the legal case that has been ongoing since 2020.
This rejection raised new concerns among investors and extended the legal uncertainty looming over the future of XRP.
Background of the Ripple-SEC Case
In December 2020, the SEC sued Ripple, alleging that the company had raised $1.3 billion through the sale of XRP, which was deemed an unregistered security.
Ripple immediately denied these allegations, stating that XRP is a cryptocurrency and not a security.
In July 2023, Judge Torres ruled that the sale of XRP on public exchanges did not meet the definition of securities, providing a partial victory for Ripple.
Rejection of the Agreement and Its Impact
On May 16, 2025, Ripple and the SEC filed a joint motion to settle the case, including a reduction of the fine from $125 million to $50 million and the lifting of the sales ban on XRP to institutional investors.
However, Judge Torres rejected this motion on procedural grounds, stating that the motion was 'procedurally improper' because the case is in the appeals process at a higher court.
This rejection caused XRP prices to drop sharply, reflecting investor concerns over ongoing legal uncertainty.
Market Reaction and Investors
The rejection of this agreement triggered a massive sell-off in the market, with XRP trading volume increasing sharply.
Many investors are concerned that ongoing legal uncertainty will continue to pressure XRP prices.
Some analysts note that while XRP has strong fundamentals, regulatory uncertainty remains a major hurdle for price recovery.
Next Steps and Important Dates
The SEC is required to submit a status update on the settlement to the Second Circuit Court of Appeals no later than June 16, 2025.
This update will provide an overview of the negotiation direction between the SEC and Ripple, as well as potential future settlements.
Without progress, this case is likely to continue into a longer appeals process, extending uncertainty for XRP and the cryptocurrency market as a whole.
The rejection of the agreement between Ripple and the SEC by Judge Torres adds a layer of complexity to this long-standing legal case.
While some previous legal victories remain applicable, ongoing uncertainty regarding the regulatory status of XRP continues to loom over the market.
Investors are advised to remain vigilant and follow further legal developments, especially ahead of the June 16, 2025 deadline, which could be a crucial turning point in this case.