Ripple’s CEO, Brad Garlinghouse, released a statement advocating that Ripple and MoneyGram have officially decided to terminate their collaboration. It is in light of a continuing legal fight with the US Securities & Exchange Commission. Nevertheless, the statement on March 8th stated that both companies are committed to developing some form of partnership together in the future. However, MoneyGram discontinued Ripple’s partnership in late February after the U. S. SEC filed a complaint against Ripple Labs claiming securities violations in December 2020. That same month, the payments firm declared that it does not employ the ODL platform or RippleNet for direct transfers of customer funds and is not a party to the SEC action.
MoneyGram reported that it had profited more than $60 million in fees. It employed XRP transfers as an alternative source of funds in payment and settlement services. Ripple acknowledged MoneyGram’s revelation at the time, informed the suspension was just short and that their collaboration stretches beyond the use of its network. However, XRP price has granted a muffled reaction to the contract termination news. Furthermore, it holds 2% profits today even as the money transfer giant is explicitly distancing itself from the 7th-largest crypto asset by market capitalization.
Ripple and MoneyGram to enter into partnership in future?
The decision to terminate the association comes in the context of the SEC filing against Ripple, as mentioned above. Both companies are open to working with each other in the future. However, this will not happen until the legal fiasco is not terminated between Ripple and SEC. The SEC’s complaint also suggests the MoneyGram involvement. Thus, representing the money transfer equipment as yet another “conduit for Ripple’s unregistered XRP sales into the market.” MoneyGram adopted Ripple’s on-demand liquidity product, xRapid, to initiate blockchain payments commercially available.
This month, MoneyGram suffered a class-action lawsuit supposedly for making misleading statements regarding its Ripple partnership. Law firm Rosen presented the class-action lawsuit on behalf of investors who bought securities from MoneyGram within June 17, 2019, and February 22, 2021. Moreover, MGI stock had dropped 9% in after-hours trading while XRP was up 2% on the day at $0.48. Recently, Tetragon also demanded to redeem its equity in Ripple. However, the Delaware court rejected the lawsuit saying the Ripple’s status is not clear if it’s a security or not.
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