The XRP market was hit hard today after U.S. District Judge Analisa Torres rejected a joint proposal from Ripple Labs and the U.S. Securities and Exchange Commission (SEC) to modify terms in their long-running legal dispute.
The rejection has reintroduced a wave of uncertainty, triggering a notable sell-off and heightened trading activity.
According to CoinMarketCap, XRP dropped 3.88% in the last 24 hours, currently trading at $2.38. Market sentiment took a hit after Judge Torres emphasized the need for a full legal explanation before approving any alterations to previous rulings.
Judge Torres Demands Legal Rigor Over Political Settlements
The joint motion, filed earlier this month, sought to remove a permanent injunction on Ripple’s institutional XRP sales and lower the company’s penalty from $125 million to $50 million.
While both parties framed the deal as a step toward closure, Judge Torres’s ruling signaled that procedural shortcuts won’t be entertained—especially in a case that has set legal precedents for the crypto industry.
Fox Business journalist Eleanor Terrett reported that Judge Torres specifically asked for a legal rationale detailing how the new terms would serve the public interest and align with her original judgment.
Her message was unambiguous: this is not just about settling — it’s about accountability and legal consistency.
Attorney John Deaton added that the SEC’s abrupt shift in posture could be seen as undermining its credibility. “After five years of litigation and regulatory pressure, suddenly seeking a lenient resolution raises questions,” he noted.
Ripple Responds as Settlement Momentum Fades
Ripple’s Chief Legal Officer, Stuart Alderoty, confirmed that the company remains committed to addressing the court’s concerns. However, legal experts suggest that the judge’s expectations create a much higher bar for any amended settlement.
This development has cast doubt over earlier hopes in the XRP community that a resolution was imminent. What once looked like the closing chapter in Ripple’s SEC battle has now reopened into another act of litigation.
Market Reacts: Volume Spikes, Confidence Dips
XRP’s trading volume spiked over 20.6% in the 24 hours following the decision, reaching $5.52 billion. Analysts believe this reflects rapid position reshuffling by investors wary of renewed regulatory risk.
Market cap also dropped to $139.87 billion, with the total supply of 58.62 billion XRP continuing to exert pressure on price recovery. The recent correction in price indicates that traders are bracing for a prolonged legal standoff, with no immediate regulatory clarity in sight.
What Happens Next?
Judge Torres’s latest ruling sends a strong signal: legal integrity and procedural correctness will take precedence over negotiated settlements, regardless of public sentiment or political optics.
Both Ripple and the SEC must now prepare a detailed, formally structured brief that legally justifies any changes to the injunction and penalties. Until then, the court will maintain its original findings, which classified Ripple’s institutional XRP sales as unregistered securities offerings.
Broader Implications for Crypto Regulation
This case continues to be a legal bellwether for how digital assets are treated in U.S. courts. While Ripple battles for a resolution, the SEC’s next steps could also influence enforcement strategies against other crypto firms.
Judge Torres’s decision, while a blow to short-term expectations, reinforces the judiciary’s insistence on rule-of-law foundations when shaping crypto policy.
