Distributed ledger firm, Ripple terminates partnership with money transfer services company MoneyGram International Inc. The move comes in light of the ongoing legal fight with the U.S. Securities & Exchange Commission. XRP price has shown a stable reaction to the news and still holds 3.55% gains as of writing.
Ripple Terminates Ties with MoneyGram
In 2019, Ripple bought a $30 million stake in MoneyGram with the deal initially set for two years. The partnership allowed MoneyGram to use Ripple’s XRP digital asset for cross-border payment and foreign exchange settlement.
As part of the deal, MoneyGram received financial incentives in the form of XRP. Even though, as disclosed in public filings, MoneyGram did not hold the XRP but rather sold it upon receipt.
In December, the U.S. Securities and Exchange Commission filed a lawsuit against Ripple, regarding XRP for conducting a $1.3 billion unregistered securities offering.
In an announcement blog post, Ripple Labs stated:
“Together, Ripple and MoneyGram have made the decision to end our current partnership agreement. We are both committed to revisiting our relationship in the future. We still believe in the promise of digital assets and blockchain technology to change the status quo in global payments for the benefit of billions of consumers around the world.”
In January, Ripple responded and filed its formal response to the SEC complaint saying that the agency’s opinion that it’s XRP digital currency is security is false. Both the company’s co-founders Garlinghouse and Larsen moved to have the charges against them dismissed.
The U.S. SEC argued that Ripple’s XRP does come under security, hence the agency is allowed to regulate it. According to the regulators, Ripple had misled investors by selling more than $1 billion without registering with the agency.
While the lack of a crypto reg framework has needlessly muddied the waters for U.S. businesses & consumers, there’s no denying what Ripple and MGI have achieved together. Billions of dollars have been sent and settled across borders through ODL w/ XRP. 2/2
— Brad Garlinghouse (@bgarlinghouse) March 8, 2021
MoneyGram Suspended Ripple Last Month
Earlier last month, MoneyGram moved to suspend its use of Ripple’s platform in light of Ripple’s ongoing legal fight with the U.S. Securities and Exchange Commission (SEC).
In February, news also surfaced that MoneyGram was facing a lawsuit from investors who purchased Ripple’s XRP when MoneyGram was harnessing it for money transfers. This was prior to the U.S. Securities and Exchange Commission (SEC) filing suit against Ripple.