Ripple: Judge’s settlement rejection has no effect on legal victory
Ripple’s legal chief said a US court’s rejection of a proposed XRP settlement with the Securities and Exchange Commission (SEC) does not pose a threat to Ripple’s win.
Judge Analisa Torres of the US District Court for the Southern District of New York rejected a joint Ripple-SEC motion seeking an indicative ruling on their proposed settlement, according to a filing on May 15.
Ripple’s chief legal officer, Stuart Alderoty, said the rejection does not reverse the company’s victory in the case. The company announced the end of the lawsuit on March 19.
Alderoty stressed that the latest court decision does not change the fact that XRP (XRP) is not a security, adding that the rejection is related to “procedural concerns with the dismissal of Ripple’s cross-appeal.”
Why did the court refuse to grant the ruling?
According to the court document, Torres denied the motion as “procedurally improper” since the SEC and Ripple failed to file the correct procedural motion to support the proposed settlement.
“By styling their motion as one for ‘settlement approval,’ the parties fail to address the heavy burden they must overcome to vacate the injunction and substantially reduce the civil penalty,” the Judge wrote.
The SEC and Ripple agreed to lower the court’s $125 million fine days before Ripple CEO Brad Garlinghouse announced the end of the case. Subsequently, Alderoty disclosed on X that the SEC will keep $50 million of the $125 million fine.
“The parties have made no effort to satisfy that burden here; their request does not even mention the Rule,” the court document stated.
Community asks for explanation
As Alderoty has not provided any details on the nature of procedural concerns by the court, but assured the public that Ripple and the SEC are “fully in agreement to resolve the case,” many in the community were unhappy with the lack of specifics from Ripple.
“First, in a recent post about this case, you said you would not be making any more X posts because the case was closed,” one XRP observer responded to Alderoty in the X thread.
“Second, I don’t think it’s enough to just say that it’s procedural. I think further explanation of what went wrong in the filing is needed,” one XRP observer wrote in an X thread,” the post continued.
Related: Ripple commits $25M to US school nonprofits
“Let’s remember that both he and Brad said the case was over, and it still isn’t; they’re cheating us a little,” another user speculated.
The news came shortly after online reports suggested that US President Donald Trump was allegedly manipulated by a Ripple-linked lobbyist into announcing the XRP token would be part of his plans for a national cryptocurrency reserve.
Many in the Bitcoin (BTC) community have been slamming Ripple for advocating for a multi-coin strategic reserve, instead of a Bitcoin-only reserve.
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The European Union is considering a partial halt to its landmark artificial intelligence laws in response to pressure from the US government and Big Tech companies.
The European Commission plans to ease part of its digital rulebook, including the AI Act that took effect last year, as part of a “simplification package” that is to be decided on Nov. 19, the Financial Times reported on Friday.
If approved, the proposed halt could allow generative AI providers currently operating in the market a one-year compliance grace period and delay enforcement of fines for violations of AI transparency rules until August 2027.
“When it comes to potentially delaying the implementation of targeted parts of the AI Act, a reflection is still ongoing,” the commission’s Thomas Regnier told Cointelegraph, adding that the EC is working on the digital omnibus to present it on Nov. 19.
EU’s AI Act entered into force in August 2024
The commission proposed the first EU AI law in April 2021, with the mission of establishing a risk-based AI classification system.
Passed by the European Parliament and the European Council in 2023, the European AI Act entered into force in August 2024, with provisions expected to be implemented gradually over the next six to 36 months.
According to the FT, a bulk of the provisions for high-risk AI systems, which can pose “serious risks” to health, safety or citizens’ fundamental rights, are set to come into effect in August 2026.
With the draft “simplification” proposal, companies breaching the rules on the highest-risk AI use could reportedly receive a “grace period” of one year.
Related: EU mulls SEC-like oversight for stock, crypto exchanges to bolster startup landscape
The proposal is still subject to informal discussions within the commission and with EU states and could still change ahead of its adoption on Nov. 19, the report noted.
“Various options are being considered, but no formal decision has been taken at this stage,” the EC’s Regnier told Cointelegraph, adding: “The commission will always remain fully behind the AI Act and its objectives.”
“AI is an incredibly disruptive technology, the full implications of which we are still only just beginning to fully appreciate,” Mercuryo co-founder and CEO Petr Kozyakov said, adding:
“Ultimately, Europe’s competitiveness will depend on its ability to set high standards without creating barriers that may risk letting innovation take place elsewhere.”
The EU’s potential suspension of parts of the AI Act underscores Brussels’ evolving approach to digital regulation amid intensifying global competition from the US and China.
After the US explicitly banned central bank digital currency (CBDC) development in early 2025, the European Central Bank accelerated work on the digital euro but later said that digital cash would not launch before 2029.
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