MoneyGram Suspends Ripple Partnership Amid SEC Lawsuit Over XRP

MoneyGram Suspends Ripple Partnership Amid SEC Lawsuit Over XRP

In a significant blow to Ripple, remittance giant MoneyGram has announced the suspension of its use of Ripple’s XRP-based payment solutions due to Ripple’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). The partnership, which began in 2019 and was set to last until 2023, enabled MoneyGram to utilize XRP for cross-border and international payment processing.

The move signals growing concerns about the legal and regulatory future of XRP, Ripple’s native cryptocurrency, and its potential impact on the broader financial and crypto ecosystems.

Key Details of the MoneyGram-Ripple Partnership

1. Historical Collaboration

• MoneyGram and Ripple initiated their partnership in 2018 with a pilot agreement to integrate XRP into remittance services.
• By 2019, the partnership expanded into a full agreement, with Ripple paying MoneyGram $61.5 million in market development fees to support XRP adoption.

2. Suspension of XRP Use

• MoneyGram announced that it would cease using Ripple’s payment solutions in Q1 2021, citing legal uncertainties stemming from the SEC lawsuit.
• The decision marks a sharp departure from previous quarters when MoneyGram earned $12.1 million in Q1 2020 from Ripple-related activities.

Impact of the SEC Lawsuit on Ripple and XRP

1. Legal Allegations

• The SEC alleges that XRP is an unregistered security, making Ripple Labs and its executives in violation of federal securities laws.

2. Ripple’s Challenges

• Ripple faces legal scrutiny, which has led to a significant decline in XRP liquidity and partnerships.
• Ripple’s executives have repeatedly denied the allegations, insisting that XRP is a digital currency and not a security.

Crypto Exchanges Delisting XRP

1. Delistings and Freezes

• Numerous cryptocurrency exchanges have suspended or delisted XRP to avoid potential regulatory complications.
• Remaining platforms have issued warnings that they may follow suit if XRP liquidity continues to decline.

2. Impact on XRP Trading

• Despite legal challenges, XRP has shown signs of recovery:
  • Recently broke the $0.50 level, rebounding from lows of $0.30.
  • Currently trading at $0.5370 on CoinMarketCap.

MoneyGram’s Decision: A Financial Impact

1. Loss of Market Development Fees

• MoneyGram’s decision to halt XRP use means it will forgo market development fees from Ripple, which contributed significantly to its earnings in previous years.

2. Future Plans

• MoneyGram has not indicated whether it will resume XRP usage if Ripple resolves its legal issues.
• The firm continues to explore alternative payment solutions to maintain its global remittance services.

Ripple’s Resilience Amid Challenges

Despite regulatory pressures and partnerships under strain, Ripple continues to advocate for XRP:

• Ripple executives remain optimistic about the outcome of the SEC case.
• XRP’s price recovery suggests that the cryptocurrency retains investor interest.

Conclusion

MoneyGram’s decision to suspend its partnership with Ripple highlights the far-reaching implications of the SEC lawsuit for both Ripple and the cryptocurrency market. As the legal battle unfolds, Ripple faces significant challenges in restoring its reputation and maintaining its network of partnerships.

While XRP has shown resilience in the market, the suspension of high-profile collaborations and regulatory uncertainties could shape its trajectory in the coming months.

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