MoneyGram halts cooperation with Ripple amid SEC lawsuit

MoneyGram, the money-transfer service, discontinued the use of an XRP-based product amid allegations by the U.S. Securities and Exchange Commission (SEC) against Ripple, according to the company’s report.

“Our dedicated employees rallied together to deliver the industry’s best customer experience, rapidly accelerate digital growth, and expand key partnerships,” said CEO @walexholmes

View MoneyGram’s fourth quarter and full-year 2020 financial results here: https://t.co/quYoYZm5IH pic.twitter.com/TMeziaE7fB

— MoneyGram International (@MoneyGram) February 22, 2021

In the first quarter of 2021, MoneyGram did not expect any revenue from its partnership with the California-based firm.

“Due to the uncertainty surrounding the SEC litigation, the company suspended trading on the Ripple platform,” the statement read.

Since mid-2019, MoneyGram has used the On-Demand Liquidity system to process cross-border payments. For interacting with it the service earned commissions in XRP.

In the same year Ripple closed a $50 million deal with MoneyGram. In the second quarter of 2020 the company paid the partner $15 million, in the third — $9.3 million, in the fourth — $8.5 million.

At the end of 2020, the SEC accused Ripple of selling unregistered securities in the form of tokens worth $1.3 billion. Later the regulator clarified the liability of Brad Garlinghouse, the company’s CEO, and co-founder Chris Larsen.

Against the backdrop of the SEC claims, major platforms dropped support for the XRP token. Among them Coinbase and OKCoin, Galaxy Digital, Bitstamp, B2C2, eToro and Kraken.

Grayscale Investments announced the liquidation of an XRP-based investment trust, and 21Shares excluded the Ripple token from its exchange-traded products.

Earlier, MoneyGram had taken a wait-and-see stance since the lawsuit was filed. At that time the service did not see any negative impact on its cooperation with the California-based company.

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