Why Judge Torres Decided to Continue the XRP Legal Dispute

The years-long legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has taken an unexpected turn. Instead of ending the case, Judge Analisa Torres has decided to continue the proceedings—a decision that surprised many market participants. Marc Fagel, a former SEC attorney, now provides insightful explanations on the platform X about why Judge Torres chose this course.

The legal basis for Torres’ decision

According to Fagel’s analysis, the reason for continuing the case was clear and understandable. The judge found that Ripple had generated hundreds of millions of dollars through unregistered securities sales. This was a significant violation of federal securities laws. Fagel summarized his view with clear words: “Probably because she found that Ripple illegally collected hundreds of millions through unregistered securities sales. Why would she give up?” This logic shows that Judge Torres considered the violation too serious to simply dismiss the case.

Ripple’s financial consequences and the new situation

Recently, Ripple withdrew its appeal and agreed to pay a $50 million fine. However, this decision did not end the discussions surrounding the case. The fact that Judge Torres rejected the joint settlement between Ripple and the SEC indicates that the judges do not automatically agree to any settlement if they recognize fundamental regulatory issues.

Does the case truly fulfill the SEC’s mission?

Another critical question arises: Does this legal dispute actually contribute to fulfilling the SEC’s core mission—namely protecting investors, maintaining fair markets, and promoting capital formation? Fagel responded directly to this question: “If a company is not willing to comply with federal laws, it should try to change them—not decide for itself which are important.” This underscores that Judge Torres wanted to send a clear message to the industry: Regulatory requirements cannot be ignored at will.

Why Ethereum played no role in the Ripple case

An interesting aspect of the debate was why Ethereum was not part of the case. Fagel clarified that a judge can only decide on matters formally brought before him. Since the SEC did not include Ethereum in the lawsuit against Ripple, Judge Torres had no legal basis to address it. Fagel also emphasized that Judge Torres’ role in this case will effectively end once the SEC formally withdraws its appeal.

The permanent ban on institutional XRP sales

A key aspect of the court ruling was the classification of institutional XRP sales as securities offerings. This means Ripple will have to either cease these transactions or conduct them strictly in accordance with securities laws. Bill Morgan, a prominent attorney in the XRP community, made an important point: a court order like the one against Ripple aims to regulate current and future behavior—not just to retroactively punish past actions. This means that Judge Torres’ decision will have long-term practical implications for Ripple and is not merely a backward-looking judgment.