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Understanding the Ripple Labs and SEC Legal Battle
Over the weekend, rumors began to spread on X, suggesting that the legal case between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs might extend until 2026. This speculation, initiated by the pseudonymous trader “Altcoin Bale,” quickly gained traction in the crypto community. However, Australian lawyer and well-known XRP analyst, Bill Morgan, was quick to debunk this claim. He argued that such an outcome is unlikely unless Judge Torres dismisses the recent joint motion, leading to a breakdown in settlement talks and subsequent appeals from both parties.
Analyzing the Possibility of a 2026 Conclusion
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Morgan’s skepticism is based on procedural realities. On June 13, Ripple and the SEC submitted a joint Rule 60(b)/62.1 motion to Judge Analisa Torres. This motion requests the dissolution of the previous injunction and suggests redistributing the $125 million civil penalty that’s currently held in escrow. Of this amount, $50 million would go to the SEC, with the remaining $75 million being returned to Ripple.
The motion indicates that if Judge Torres is open to granting the request, both parties would pursue a limited remand from the Second Circuit. This would allow the district court to finalize a new judgment and resolve all appeals. Importantly, the Second Circuit has currently halted appeals, requiring only a status report from the SEC by August 15, 2025. This administrative date has been misinterpreted as a potential endpoint for the litigation, but it does not necessarily mean the case will stretch to 2026.
The Court’s July 2023 Summary Judgment
In July 2023, Judge Torres issued a summary judgment, ruling that institutional sales of XRP were unregistered securities offerings, while programmatic exchange sales were not. Following further legal discussions, she imposed a $125 million penalty and a permanent injunction in August 2024. Although both parties initially filed appeals, by March 2025, the SEC had withdrawn its objection regarding programmatic sales, signaling a reduction in its aggressive crypto enforcement stance. This led to settlement negotiations and the current joint motion.
The revised request surpasses the previous version that Judge Torres dismissed due to procedural issues. It outlines “exceptional circumstances,” including the SEC’s policy shift and both parties’ desire to conclude the litigation, which are essential for modifying a final judgment under Rule 60(b)(6). If Judge Torres provides the “indicative ruling” requested, the case could be resolved swiftly on limited remand without extensive appellate procedures.
Potential Outcomes and Market Impact
While Morgan acknowledges that a total breakdown in settlement is “not impossible,” he considers it improbable. If Judge Torres were to reject the joint motion and maintain the injunction, both parties could reinstate their cross-appeals. This scenario might delay a final decision until late 2026, but Morgan views it as unlikely.
As of the latest update, XRP is trading at $1.99.
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