On June 26, 2025, Judge Analisa Torres of the U.S. District Court for the Southern District of New York denied a joint request by the SEC and Ripple Labs, Inc. to vacate a permanent injunction and reduce Ripple’s civil penalty under a proposed settlement agreement. The Court held that the parties failed to demonstrate the “exceptional circumstances” required under Rule 60(b) to modify a final judgment in light of public interest considerations.

In 2023, the Court found Ripple liable under Section 5 of the Securities Act of 1933 for unregistered institutional sales of XRP. Following that decision, the Court entered a final judgment permanently enjoining Ripple from further violations and imposed a civil penalty of $125 million. 

In seeking to vacate the injunction and reduce the penalty by 60%, the parties cited a post-judgment settlement agreement, evolving SEC enforcement priorities, and a desire to conclude pending appeals. The Court rejected these arguments, emphasizing that the final judgment serves a broader public interest—not merely the interests of the litigants—and that vacatur is only appropriate in extraordinary circumstances. 

The Court numerous prior statements by the SEC and its earlier findings that Ripple’s misconduct was extensive, deliberate, and likely to continue without judicial restraint. It criticized the parties for seeking to undo the judgment while conceding that the facts and risks underlying the injunction remain unchanged.

Takeaways

Courts will not readily vacate enforcement judgments, even if both regulator and respondent agree post hoc. Businesses should not assume that private settlement negotiations will unwind public judgments absent extraordinary circumstances. A permanent injunction, once imposed, can survive even shifting regulatory attitudes or discretionary enforcement choices. 

Settling crypto enforcement matters may require strategic timing and structure to avoid becoming bound by unmodifiable judgments. Businesses negotiating with regulators should carefully assess timing of appeals and final orders.

Our attorneys are available to provide guidance on token offerings, securities registration, or navigating SEC enforcement proceedings.