Investors have filed a class action lawsuit against money transfer service MoneyGram International, accusing it of making false statements about XRP cryptocurrency and a partnership with Ripple Labs.
A class action lawsuit was filed against MoneyGram on behalf of investors who purchased MoneyGram securities between June 17, 2019 and February 22, 2021. Investors say MoneyGram has made controversial statements regarding its partnership with Ripple Labs. In 2019, it became known that Ripple signed an agreement with MoneyGram, according to which Ripple will buy shares of the service in the amount of $ 30 million, and then invest another $ 20 million in MoneyGram within two years. In addition, in 2019, the MoneyGram management announced that it was testing the solution Ripple On-Demand Liquidity (ODL) for remittances between the US and Mexico.
Late last year, the US Securities and Exchange Commission (SEC) accused Ripple of conducting an unregistered ICO worth $ 1.3 billion, counting XRP coins as securities. Amid the SEC’s lawsuit against Ripple, many cryptocurrency exchanges began delisting XRP, and MoneyGram said it did not use the Ripple ODL platform for money transfers.
Investors accuse MoneyGram that the payment service did not knowingly disclose information that XRP was considered by the regulator as unregistered securities. If the SEC applies securities laws to Ripple, it could negatively impact MoneyGram’s operations. The investors’ lawsuit indicated that MoneyGram’s public statements were false and misleading, and when the information became known, many investors suffered losses.
Earlier, MoneyGram executives suggested that cryptocurrencies will be ubiquitous for international money transfers in the future, but lack of liquidity is the main obstacle to achieving this goal.
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