XRP’s legal status under U.S. securities law remains a settled but closely watched issue after the Ripple ruling, particularly amid renewed scrutiny of previously dropped crypto enforcement cases. The question centers on whether regulators can reopen matters already decided by the courts.

Lawyer Bill Morgan responded on social media platform X on Jan. 18 to a post discussing his legal view that the SEC v. Ripple case is effectively closed because “res judicata” bars relitigation. He opined: “That is correct. And the doctrine of Res Judicata refers to both claim preclusion and issue preclusion.”

Morgan expanded that the way the U.S. Securities and Exchange Commission (SEC) conducted the case forced the court into a decisive analysis. “Because of the way the SEC conducted the litigation, specifically referring to different broad categories of sales and distinguishing between Ripple sales of XRP to institutions and programmatic sales in the secondary market, and its case theory that XRP embodied or represented a security, the court needed to analyse XRP itself,” he said, adding:

“ This was a high risk overreach strategy by the SEC in the litigation and it backfired. Strategic level mistakes suck in litigation.”

Continuing his explanation, the lawyer detailed how the structure of the case shaped the outcome, writing: “Deciding whether XRP itself was or was not an investment contract was made necessary by the way in which the SEC framed its, so the Court could then proceed to analyse the different broad categories of sales that the SEC put before the court.”

The principle of res judicata, or “a matter judged,” acts as a legal bar that prevents the same parties from relitigating a dispute once a final judgment is reached. In Ripple’s case, this doctrine provides a permanent shield because the SEC did not appeal the ruling that XRP itself is not a security, effectively locking in that status. This ensures the matter remains legally settled, regardless of future shifts in regulatory leadership or political climate.

Read more: SEC Court Filing Shows Ripple’s Regulatory Path Clearing—XRP Could Rip Once Approval Lands

In 2020, the SEC sued Ripple, alleging XRP was an unregistered security. A landmark 2023 ruling by Judge Analisa Torres established that while direct institutional sales were securities, programmatic (retail) sales on exchanges were not. After years of discovery and the release of the “Hinman documents,” the case reached a final judgment in August 2025. Ripple paid a reduced $50 million penalty—a fraction of the SEC’s initial $2 billion demand. Both parties subsequently dropped their appeals, cementing XRP’s unique status as the only digital asset with a clear judicial ruling that it is not a security.

He explained the consequences of a different finding, stating: “If the judge had found that XRP itself was a security it would not have had to analyse the facts and circumstances of each different category and would have found any offer for sale of XRP by Ripple was an investment contract.” Morgan added: “The SEC lost big time on this issue and it allowed the court to distinguish between institutional sales and programmatic sales and other types of distributions of XRP by Ripple and make separate findings for each category.” He further clarified the lasting effect of the ruling:

“The SEC cannot in any future claim relitigate the issue of whether XRP itself is a security. The SEC didn’t even bother to challenge this finding that XRP itself is not an investment contract in its Appeal of the judgement of Judge Torres.”

He concluded: “Nor can the SEC relitigate claims about the Ripple sales of XRP between 2013 and 2020. It could of course litigate an issue about sales of XRP since 2020 or in the future but that case would be constrained to some extent by the issue preclusion arising from the judgment of Judge Torres in July 2023.”

• Is the SEC v. Ripple case legally closed?
  Yes, res judicata bars the SEC from relitigating claims or issues already decided in the Ripple case.
• Did the court rule that XRP itself is not a security?
  Yes, the court found XRP itself is not an investment contract, a point the SEC did not appeal.
• Can the SEC reopen past XRP sales claims?
  No, claims tied to Ripple’s XRP sales from 2013 to 2020 are precluded by final judgment.
• Could future XRP sales still face scrutiny?
  Any future cases would be limited by issue preclusion from the July 2023 ruling.

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