Story Highlights
Ripple and SEC’s settlement hits a roadblock as Judge Torres rejects their motion over a key procedural error involving Rule 62.1.
Legal expert warns the failed motion may force Ripple and the SEC to renegotiate the deal and seek new SEC commissioner approval.
The courtroom drama between Ripple Labs and the U.S. SEC took another unexpected turn as Judge Analisa Torres denied a joint request from both parties due to a procedural misstep. Although Ripple and the SEC were close to settling, they used the wrong legal rule in their filing.
This mistake now sends them back to fix it, and legal expert Bill Morgan says it could seriously affect the whole settlement. Ripple has now officially asked the court for an indicative ruling under Rule 62.1 and relief from final judgment under Rule 60(b).
Morgan highlighted that the original settlement agreement referenced Rule 62.1, which allows courts to provide an indicative ruling when a case is on appeal. However, before that, you must understand what it all means. Rule 60 is for asking a judge to change or cancel a final judgment.
It’s used when both sides want to undo something the court has already decided. Rule 62.1 is for when the case is already on appeal — the judge can’t act, but can say what they would do if the case came back.
In the present scenario, with Judge Torres denying that motion, the question becomes whether Ripple and the SEC can now pivot and refile under Rule 60, which permits a court to relieve a party from a final judgment under exceptional circumstances.
One of the most important issues Morgan pointed out is whether a new motion under Rule 60 would require another vote from the five SEC commissioners. The previous vote specifically approved a process using Rule 62.1. If the legal path changes, Morgan suggests it’s unclear whether the original vote still holds or if a fresh round of approval is needed from the commission.
Uncertainty Around the Settlement’s Validity
Morgan also questions whether the failure to get an indicative ruling under Rule 62.1 fundamentally disrupts the settlement. While the agreement’s operative clauses are tied to the recitals, which describe the overall terms, there’s no clear backup plan in the event the Rule 62.1 motion fails. Moreover, this raises doubts about whether the settlement can proceed at all without rewriting or renegotiating key parts.
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