Ripple ends its partnership with MoneyGram

Ripple terminated its cooperation with MoneyGram’s money-transfer service, according to Brad Garlinghouse, the CEO of the California-based company.

Today, we’re announcing that Ripple and MGI have together decided to wind down our current partnership agreement, and are both committed to revisiting it in the future. See our full statement: 1/2 https://t.co/KGOzPWuThR

— Brad Garlinghouse (@bgarlinghouse) March 8, 2021

He said that in the future the firms intend to revisit the terms of the partnership.

“While the lack of a regulatory framework for cryptocurrencies is needlessly muddying the waters for business and users in the United States, one cannot deny the joint achievements of Ripple and MGI [MoneyGram],” Garlinghouse said.

In the summer of 2019, the service began processing cross-border payments via the On-Demand Liquidity (ODL) system, which uses the XRP token. For interacting with ODL, MoneyGram earned commissions in XRP.

In November 2019, Ripple closed a deal worth $50 million, receiving 9.95% of the partner’s common stock. In the second quarter of 2020, the company paid the service $15 million, and in the third — $9.3 million.

MoneyGram chief Alex Holmes said that over 18 months of cooperation with the fintech company, the number of transactions increased by 220%, and online customers grew by 140%.

In December 2020, the U.S. Securities and Exchange Commission charged Ripple with selling unregistered securities in the form of $1.3 billion worth of tokens. Later the regulator clarified the responsibility of Garlinghouse and co-founder Chris Larsen.

As a result, a number of cryptocurrency platforms and firms stopped supporting the XRP token. Among them were Coinbase and OKCoin, Galaxy Digital, Grayscale Investments and Bitstamp.

Since the suit was filed, MoneyGram had taken a wait-and-see stance. In February 2021 the service declined to use a product based on the XRP token, citing uncertainty regarding the Ripple case with U.S. authorities.

Earlier, Rosen Law Firm lawyers filed a class action against MoneyGram. They argued that the company did not warn about the possible classification of the XRP token as a security and the potential loss of revenue from commissions.

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