Judge Torres blocks settlement in the SEC-Ripple case and intensifies the regulatory crisis

The recent court ruling from May 15th demonstrates how complex crypto regulation remains in the USA. Judge Analisa Torres dismissed the joint motion from the SEC and Ripple, explaining her decision by stating that the procedure was “not procedurally permissible.” This keeps one of the most significant legal battles in the crypto industry ongoing.

The Settlement Fails in Court

Just eleven days after the Securities and Exchange Commission and the crypto company Ripple submitted a settlement agreement, the court rejected it. Both parties had hoped to resolve the years-long dispute over XRP regulation and to cease enforcement actions.

Judge Torres sharply criticized the applicants’ argument. She argued that the parties merely presented their agreement as a “settlement approval” without considering the legal hurdle they would need to overcome to lift the preliminary injunction and significantly reduce civil sanctions. The judge emphasized that procedural steps alone are not enough – substantive legal issues must be addressed.

New SEC Course Under Trump Administration

The failed settlement occurs during a phase of fundamental changes at the regulatory agency. The current U.S. government under President Donald Trump is working on a fundamentally different approach to digital assets. Paul Atkins, the new SEC Chairman, replaced his predecessor Gary Gensler, who was known for his strict enforcement approach against the crypto industry.

Atkins already signaled a different set of priorities at an SEC conference on May 12th: he announced that a key goal of his term would be the creation of a well-thought-out regulatory framework for crypto asset markets. This framework aims to establish clear standards for issuance, custody, and trading, while also monitoring unfair market participants.

Impact on the Industry

Judge Torres’s rejection marks a turning point: while the SEC under new leadership signals an intention to take a constructive course, the court decision shows that the judiciary is also not ready to simply close the matter. This could ultimately lead to a clarifying decision by a higher court if both sides appeal – a scenario both parties have already considered.