Why SEC Hasn’t Closed Ripple Case —Crypto Lawyer Offers Bold Theory

Lawyer James Murphy, also known as Metalawman, has put forward a theory about the delay in the U.S. Securities and Exchange Commission (SEC) dismissing its case against Ripple. A specialist in financial services law, he frequently analyzes cryptocurrency-related litigation, including the Ripple vs. SEC lawsuit.

On March 1, he stated on social media platform X: “I have a theory about the SEC’s unexplained delay in dismissing the Ripple case.” The lawyer suggested:

It might not be the SEC. It could be that Ripple is negotiating hard to get the SEC to agree to vacate some or all of Judge Torres’ decision.

While the ruling was largely positive for XRP holders, Murphy pointed out that Ripple may have concerns about certain findings. “The Torres decision was unquestionably great for XRP holders, but the (a) finding of securities law violations and the (b) injunction (with attendant ‘bad boy’ provisions) are not so great for Ripple. This is particularly true if Ripple is considering a future exempt securities offering or IPO,” he detailed.

The SEC sued Ripple in December 2020, alleging XRP was an unregistered security. In July 2023, Judge Torres ruled XRP was not a security in retail sales but was in institutional sales. Ripple was fined $125 million in August 2024, far less than the SEC’s $2 billion demand. The SEC appealed in October 2024, and as of March 2025, the case remains unresolved, with major regulatory implications.

The lawyer speculated that the SEC would have accepted a settlement in which both parties withdrew their appeals and Ripple paid the $125 million penalty. He explained:

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 (to me at least) that Ripple could be negotiating for a better deal than that.

He emphasized the speculative nature of his theory, stating: “This is all pure speculation on my part. I could be wrong. Wouldn’t be the first time.”

In a follow-up post, Murphy highlighted that federal judges have become increasingly hesitant to vacate prior rulings as part of settlements. While this was more common in the past, judicial attitudes have shifted in recent years. He cautioned that even if Ripple and the SEC reached an agreement, a judge’s approval would not be guaranteed. His insights add another layer of complexity to the ongoing legal battle, as Ripple’s long-term regulatory strategy remains uncertain.

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