Holland & Knight continues its SECond Opinions Blog Summer Series featuring posts written and researched by the associates from our Securities Enforcement Defense Team. This blog comes from Miami Associate Andrew W. Balthazor, co-chair of the firm's Crypto Asset Dispute Team, who focuses his practice on solving problems born of digital-era innovations such as distributed ledger technologies and cryptocurrencies and other high-stakes complex commercial litigation.
The regulatory landscape is never static. The arrival of a new presidential administration often brings a shift in enforcement priorities, and President Donald Trump's administration has delivered that in spades with regard to the financial and crypto sectors.
For those facing enforcement actions, the temptation to "wait out" what they may view as an unfavorable environment or seek relief based on new leadership's policy changes is real. Now, with the SEC's Aug. 21, 2025, appointment of Judge Margaret Ryan as its new director of the Division of Enforcement, many in the securities industry – and certainly those in the crosshairs of ongoing investigation – are curious to see what develops in terms of any new policies or priorities
But recent events in three cases – SEC v. Ripple, CFTC v. Gemini Trust and CFPB v. Townstone Financial – demonstrate both the potential and limits of relying on such shifts as a litigation strategy.
Ripple: Settlement Blocked, Appeals Dismissed and the Limits of Executive Discretion
Ripple Labs' long-running battle with the SEC over XRP sales reached a critical juncture this summer. After Judge Analisa Torres found that Ripple's institutional sales of XRP violated the Securities Act of 1933, she imposed a $125 million penalty and a permanent injunction. Both parties appealed, but as the SEC's enforcement posture softened under the new administration, the parties agreed to settle: Ripple would pay a reduced $50 million penalty and have the injunction lifted, contingent on the district court's approval.
The court did not approve, emphasizing that her judgment was based on the facts and law as determined at trial, not on shifting agency priorities. Her order prioritizes the public interest in finality and deterrence notwithstanding the parties' private agreement, especially where earlier proceedings resulted in finding the underlying conduct egregious and likely to recur. The court indicated that it would not vacate the injunction or reduce the penalty, noting that neither the facts nor the law had changed – only the SEC's appetite for enforcement had.1
Of note, Ripple agreed to dismiss its appeal even though it could have invested in appellate litigation for a chance to avoid a $125 million penalty – a potentially excellent return. The risk of creating adverse U.S. Court of Appeals for the Second Circuit precedent on institutional sales generally and with respect to Ripple's future fundraising activities may have weighed heavily against Ripple prosecuting its appeal. Ultimately, both parties dismissed their appeals in early August 2025, leaving Judge Torres' rulings intact and unreviewed. The retail/secondary market sales win for Ripple stands, but the institutional sales finding remains. And Ripple's penalty and obey-the-law injunction remain in place.
Key Takeaway: Even when agency priorities shift, courts are reluctant to revisit final judgments absent extraordinary circumstances. The judiciary's commitment to finality and the public interest can override the parties' desire to settle on new terms, especially where the facts and law remain unchanged.
Gemini: Settlors' Remorse and Efforts to Undo a Prior Settlement
Gemini Trust's experience with the Commodity Futures Trading Commission (CFTC) offers a cautionary tale about the risks of settling too soon. After years-long investigation and litigation, Gemini settled a false statements case in early 2025 and agreed to pay a substantial penalty. But as the new administration began dropping other crypto enforcement actions, Gemini apparently found itself wishing it had waited. In a detailed complaint to the CFTC Inspector General, Gemini argued that it was forced to settle under duress, the Division of Enforcement acted improperly and the underlying evidence was flawed. The letter reads as both a post-mortem and a plea for relief, highlighting alleged abuses and double standards in the agency's conduct.2
Gemini's effort to unwind its settlement faces steep odds. Courts and agencies are generally unwilling to revisit voluntary settlements, especially where the only change is a new enforcement philosophy. The practical lesson: Timing matters. Had Gemini delayed, it might have benefited from the administration's changed priorities, though Gemini no doubt made what it considered the best decision at the time, under different circumstances. Now, the settlement may well stand, and Gemini's recourse is limited.
Key Takeaway: Settling in the face of aggressive enforcement may foreclose later opportunities to benefit from a more favorable regulatory climate. Once a settlement is reached, courts and agencies are loath to reopen the case simply because the winds have shifted.
Townstone Financial: Finality Trumps Policy Reversal
In CFPB v. Townstone Financial, the parties jointly moved under Federal Rule of Civil Procedure 60(b)(6) to vacate a stipulated judgment and consent decree after the CFPB's new leadership, acting under a presidential executive order, concluded that the case had been improperly filed. For its part, the agency argued that its prior enforcement action lacked a factual basis and targeted constitutionally protected speech. But the district court denied the motion, emphasizing the importance of finality and the public interest in upholding judgments, especially those affecting the public rather than just private parties.3
The court was clear in its reasoning: Rule 60(b)(6) relief is reserved for extraordinary circumstances, and a change in agency leadership or enforcement philosophy does not suffice. The voluntary nature of the settlement, absence of new facts or law, and public impact of the alleged wrongdoing all weighed against vacatur. The court refused to open what it saw as a "Pandora's box" of allowing new administrations to routinely revisit and unwind completed litigation.4
Key Takeaway: Courts are highly resistant to vacating judgments or consent decrees based solely on a change in agency leadership or enforcement priorities. The need for finality and public interest in stable enforcement outcomes are paramount.
Strategic Implications: Timing, Context and the Limits of "Meta-Gaming" Enforcement
These cases collectively illustrate that though a new administration's enforcement priorities can affect the likelihood of future actions, they rarely provide a reliable basis for undoing past judgments or settlements. Timing and context are critical: Those who delay litigation or settlement may benefit from a more favorable regulatory climate, but once a judgment is entered or a settlement is reached, the path to change prior outcomes and obtain different relief is narrow and steep.
For enforcement targets, the lesson is clear. The prospect of a future policy shift may at times justify a willingness to pursue or continue litigation in light of the difficulty in later unwinding resolved disputes. Courts remain steadfast in their commitment to finality, public interest and the integrity of the judicial process and, thus, resist efforts to un-ring the bell of an earlier resolution.
Bottom Line: Meta-gaming regulatory enforcement by betting on future policy changes can be a high-risk strategy. Though it may pay off for those who wait, those who settle or receive judgment under a prior administration are unlikely to find relief simply because the government's priorities have changed.
For more on the evolving intersection of regulatory enforcement and executive branch priorities, stay tuned to SECond Opinions.
Notes:
1 See Order Denying Motion for Indicative Ruling, SEC v. Ripple Labs, Inc., No. 20-cv-10832, at *4–5 (S.D.N.Y. June 26, 2025).
2 See June 13, 2025, letter from Gemini Trust Co. LLC to CFTC Inspector General Christopher Skinner.
3 See Order Denying Rule 60(b)(6) Motion, CFPB v. Townstone Fin., No. 20-cv-04176, (N.D. Ill. June 16, 2025).
4 Id. at *14.
