Ripple vs SEC: The $2 Billion Legal Slugfest That Refuses to Die

Three years in and the courtroom drama still delivers more twists than a Netflix thriller. The SEC’s latest Hail Mary? A jaw-dropping $2 billion penalty demand—because nothing says ’protecting investors’ like burning cash on legal fees.

Meanwhile, XRP holders toggle between euphoria and despair as each ruling sends the token on another joyride. This week’s episode: Judge Torres’ surprise rejection of the SEC’s ’expert’ witnesses, leaving regulators scrambling like exchange hackers after a cold wallet raid.

The endgame? Either the mother of all settlements or a Supreme Court showdown that could rewrite crypto’s rulebook. Until then, grab popcorn—and maybe some XRP, if you enjoy trading based on courtroom body language.

In the latest development in the ongoing legal battle between the SEC and Ripple, Judge Analisa Torres has denied a motion from both parties for an indicative ruling. The court made it clear that if jurisdiction were returned to it, the motion WOULD still be denied as “procedurally improper.”

In the community, some argued that the SEC can’t realistically win this fight unless it admits it was wrong about XRP’s status. Attorney John Deaton has made it clear: without an admission, there’s no reversal. The judge has already ruled — XRP is not a security when sold to the general public.

However, legal expert Marc Fagel offered a different view, saying that while the court did rule that Ripple’s programmatic sales of XRP weren’t securities transactions, it also found Ripple liable for unregistered securities sales to institutional investors, hitting them with a $125 million penalty. 

As Fagel explained, this makes it tricky for the SEC to reverse course now without a compelling reason beyond political pressure, since they’d essentially have to argue that the court’s earlier judgment was wrong.

“The point is that the court found Ripple’s violation of the law warranted an injunction and a $125m penalty, and now the parties (including the SEC, which made the argument) have to explain to the court why the court was wrong,” Fagel said.

Ripple’s Chief Legal Officer Stuart Alderoty said that nothing in this order affects Ripple’s earlier wins — including the court’s decision that XRP itself is not a security. He explained that this decision was about procedural technicalities related to the dismissal of Ripple’s cross-appeal, not the substance of the case. According to him, both Ripple and the SEC remain aligned in their intention to fully resolve the case and plan to revisit the issue together in court.

For now, both sides appear committed to resolving the case, but the longer it drags on, the more it risks damaging the SEC’s standing — at least in the eyes of the crypto community.