Ripple and MoneyGram Officially End Partnership Amid Ongoing SEC Legal Battle

Ripple and MoneyGram Officially End Partnership Amid Ongoing SEC Legal Battle

Ripple Labs and MoneyGram International have officially ended their partnership, with Ripple’s CEO, Brad Garlinghouse, releasing a statement on March 8 confirming the decision. This termination comes in light of the ongoing legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC), which filed a complaint against Ripple in December 2020, accusing the company of securities violations.

Despite the termination of their collaboration, both companies expressed a desire to explore future partnership opportunities once the legal issues are resolved. MoneyGram initially suspended its relationship with Ripple in late February, just after the SEC’s lawsuit was filed. At that time, MoneyGram announced that it would no longer use Ripple’s On-Demand Liquidity (ODL) platform or RippleNet for customer fund transfers and clarified that it was not a party to the SEC’s legal action against Ripple.

Ripple’s Acknowledgment and MoneyGram’s Financial Impact

Ripple acknowledged MoneyGram’s decision to suspend their collaboration, emphasizing that their relationship extended beyond the use of Ripple’s network. MoneyGram had previously profited over $60 million in fees from using XRP for payment and settlement services through Ripple’s ODL platform. However, the announcement of the partnership’s end did not significantly affect XRP’s price, which saw a modest 2% increase on the day, trading at approximately $0.48.

While XRP’s price reaction was muted, it indicates that market participants have largely anticipated this development, especially given the ongoing legal challenges Ripple faces. The SEC’s complaint has cast a shadow over Ripple’s operations, including its partnerships with companies like MoneyGram.

Legal Challenges and MoneyGram’s Legal Troubles

The termination of the Ripple-MoneyGram partnership comes amid the intensifying legal battle between Ripple and the SEC. The SEC’s complaint accuses Ripple of using MoneyGram as a conduit for unregistered XRP sales into the market, further complicating the relationship between the two companies. MoneyGram had adopted Ripple’s xRapid product, now known as On-Demand Liquidity, to facilitate blockchain-based payments commercially.

Additionally, MoneyGram is currently facing a class-action lawsuit, filed by law firm Rosen on behalf of investors who purchased securities from the company between June 17, 2019, and February 22, 2021. The lawsuit claims that MoneyGram made misleading statements regarding its partnership with Ripple, which may have misled investors about the risks associated with their investment. Following the filing, MoneyGram’s stock dropped 9% in after-hours trading.

Future of Ripple and MoneyGram’s Partnership

Although their collaboration has ended, both Ripple and MoneyGram are open to the possibility of working together again in the future, provided that the legal issues are resolved. The SEC’s complaint involving Ripple has created a cloud of uncertainty over its operations, including its partnerships with financial institutions like MoneyGram.

Ripple’s legal team continues to fight the charges in court, arguing that XRP does not meet the criteria for being classified as a security. Until the case is settled, companies like MoneyGram will likely remain cautious in their involvement with Ripple and XRP. However, once the legal situation is clarified, there could be an opportunity for renewed collaboration between the two companies.

Tetragon’s Lawsuit and Ripple’s Legal Landscape

In addition to the legal challenges with the SEC, Ripple is also facing legal action from its investor, Tetragon Financial Group, which is seeking to redeem its equity in Ripple. However, the Delaware court recently rejected Tetragon’s request, ruling that Ripple’s legal status remains unclear, particularly regarding whether XRP qualifies as a security.

Despite the ongoing legal hurdles, Ripple’s leadership continues to defend its stance that XRP is not a security and is committed to resolving these issues in court. As Ripple navigates its legal battles, the company’s relationship with other businesses, including MoneyGram, may be affected, but the potential for future collaboration remains.

Conclusion: Ripple’s Path Forward Amid Legal Challenges

In conclusion, the end of Ripple’s partnership with MoneyGram highlights the ongoing challenges the company faces due to the SEC lawsuit. While the immediate termination of the partnership may have a minimal impact on Ripple’s operations, the legal uncertainty surrounding XRP continues to pose a significant hurdle for Ripple and its collaborators. However, both Ripple and MoneyGram have expressed their willingness to work together again in the future, pending the resolution of Ripple’s legal situation.

As the legal battle continues, the future of Ripple’s partnerships, including with MoneyGram, will largely depend on the outcome of the SEC’s case and how the regulatory landscape for cryptocurrencies evolves.

To learn more about the latest developments in the crypto world, explore our article on the most significant events shaping the digital asset market.