A federal judge in New York has turned down a joint request from the US Securities and Exchange Commission (SEC) and Ripple Labs to approve a proposed settlement agreement. The agreement would have reduced Ripple's civil penalty to $50 million and eliminated a permanent injunction against the company.
However, District Judge Analisa Torres expressed concerns that removing the injunction would allow Ripple to continue violating federal securities laws. The judge noted that the SEC had previously argued that a permanent injunction was warranted due to Ripple's history of violating the law and its potential to continue doing so.
The request for a settlement approval comes amid changes in the SEC's leadership and a shift towards a more crypto-friendly regulatory approach. Despite this, Judge Torres emphasized that the SEC's credibility depends on its ability to maintain consistent arguments in ongoing litigation, rather than granting favors to specific companies.
This is the second time Judge Torres has rejected a request for an indicative ruling from the SEC and Ripple. The parties may still choose to withdraw their appeals or pursue further action, but they must comply with the court's final judgment and the law.