Lawyer James “MetaLawMan” Murphy of Ludlow Street Advisors, LLC has provided a detailed theory on why the SEC’s dismissal of the Ripple case has been inexplicably delayed. According to Murphy, rather than the delay being solely due to the SEC’s internal processes, it could be that Ripple is engaged in strenuous negotiations aimed at revising key components of Judge Torres’ ruling.
Ripple, Not SEC, Might Be Stalling Case Resolution
Murphy explained that while Judge Torres’ decision was undoubtedly beneficial for XRP holders—particularly regarding aspects that positively impact market sentiment—the decision also contained elements that could jeopardize the company’s future strategic moves. “The Torres decision was unquestionably GREAT for XRP holders, BUT the finding of securities law violations and the injunction with attendant ‘bad boy’ provisions are not so great for Ripple,” Murphy stated via X.
He further speculated that if Ripple is considering a future exempt securities offering or an IPO, the current judgment would represent a significant operational and reputational hurdle. He continued, “I believe the SEC would have accepted a settlement—where both sides dismiss their appeals and the SEC takes the $125 million penalty—in a heartbeat. So, it makes sense that Ripple could be negotiating for a better deal than that.” Although he acknowledges the speculative nature of his theory, Murphy’s comments offer a glimpse into the complex legal maneuvers potentially at play.
Complementing Murphy’s perspective, pro-XRP lawyer Jeremy Hogan delved into the intricate legal process of dissolving the injunction imposed by Judge Torres. Hogan pointed out that the court’s order effectively bars Ripple from making direct sales to customers—a restriction that Ripple would undoubtedly prefer to eliminate.
“Ripple would rather not have the injunction at all,” Hogan remarked. He drew an analogy between the legal process and personal restraining orders, emphasizing that “once a court issues an injunction, the parties themselves can’t simply agree between them to disregard the injunction.” He further illustrated the point with a vivid comparison: many individuals have faced legal consequences for assuming that a restraining order could be casually ignored when personal relationships improved.
Hogan’s analysis extended into the procedural challenges that both Ripple and the SEC must navigate in order to modify the existing court order. He elaborated on the role of Federal Rule 60, which governs “relief from a judgment,” noting that any motion to vacate the injunction must convincingly demonstrate a significant change in circumstances.
“The court based its decision on the Howey test, not on the SEC’s rule changes, and the SEC cannot ‘Trump’ US Supreme Court law,” Hogan explained. This point underscores the rigidity of legal precedent in securities law, which complicates any attempt by Ripple to negotiate a rollback of the injunction solely on the basis of evolving regulatory standards.
Ripple would first need to convince the SEC to sign off on a carefully drafted motion that seeks to dissolve the injunction. Following this, both parties would have to stipulate to dismiss their appeals, and then the trial court would need to rule favorably on the motion. Hogan suggested that “this is why I think the case doesn’t resolve until April-May whereas all these other cases have already been dismissed.” He also left open the possibility that if the motion is crafted and executed with exceptional care, the appeals might be dismissed even earlier—potentially in April, before Ripple’s brief due date.
At press time, XRP traded at $
