An Australian-based lawyer has argued that the SEC v. Ripple case is legally closed and cannot be reopened, citing the legal doctrine of res judicata.
Attorney Bill Morgan explained that this principle prevents parties from relitigating claims that a court has already decided. He stressed that Judge Analisa Torres has already issued final rulings on the core issues in the case, including the legal status of XRP and Ripple’s various sales of the token between 2013 and 2020.
Since the court resolved these matters on the merits, he contends that the SEC is permanently barred from revisiting them.
Key Points
- House Democrats have criticized the SEC for dismissing more than 10 crypto enforcement actions, including the Ripple case.
- The res judicata doctrine prevents the SEC from relitigating the Ripple case because a court has already ruled on the matter.
- The SEC’s litigation strategy backfired, forcing a broader ruling than it likely intended.
- Future cases would be heavily constrained, even if the SEC targeted post-2020 XRP sales.
Why the SEC Can No Longer Relitigate Ripple’s Case
Morgan’s comments followed reports that House Democrats criticized SEC Chair Paul Atkins for dropping more than a dozen crypto-related enforcement actions, including cases against Ripple and Binance. The lawmakers urged the SEC to continue action in the lawsuit involving Justin Sun.
In response, Morgan argued that the SEC cannot simply revive closed cases, as res judicata applies once a court reaches a final judgment.
He further noted that the SEC weakened its own position by broadly arguing that XRP itself and multiple categories of Ripple’s XRP sales constituted securities. That strategy allowed Judge Analisa Torres to rule that XRP, in and of itself, is not a security and to evaluate different types of XRP distributions separately. As a result, the SEC lost key claims related to programmatic and secondary market sales.
Since those issues have already been adjudicated, Morgan maintains that the res judicata doctrine now prevents the SEC from relitigating any claims arising from Ripple’s XRP sales during the 2013–2020 period.
“SEC Can Still Probe Ripple”
In the meantime, the legal expert stressed that the SEC could still pursue litigation related to Ripple’s XRP sales that occurred after 2020 or any future distributions.
Even then, he said the SEC would not be starting from scratch, because Judge Torres’ 2023 ruling would still limit what the agency could argue.
While most community members agree that the SEC cannot relitigate the Ripple lawsuit under the res judicata doctrine, some users have offered a different view. One user, Zedzies, argued that the SEC could revisit the case if a change in the law invalidated the doctrine.
However, such a scenario would require direct congressional intervention. A lawmaker would need to introduce new legislation, which would then pass through committee review, floor debate, voting in both chambers, and ultimately receive presidential approval.
Given the complexity and political hurdles involved, this outcome appears unlikely without broad support from both the legislative and executive branches.