Payment service MoneyGram on Monday announced the termination of work with Ripple solutions due to the claim of the US Securities and Exchange Commission (SEC) against the latter. The companies entered into cooperation in June 2019 and planned to continue it until July 2023.
“In light of the uncertainty surrounding the current litigation with the SEC, the company has suspended trading on the Ripple platform,” writes MoneyGram.
MoneyGram used the RippleNet platform and the XRP cryptocurrency built into it to settle transactions with foreign currencies within its own international transfer service. Over time, it turned out that Ripple paid MoneyGram for cooperation, making such transfers as “commission for market development.” In the fourth quarter, MoneyGram received $ 8.5 million from Ripple, but “is not going to acquire any benefit from commissions for the development of the Ripple market in the first quarter.”
In 2019 and 2020, Ripple transferred $ 11.3 million and $ 50.2 million to MoneyGram, respectively, in addition to the $ 50 million the XRP issuer agreed to pay initially. Since the SEC filed a lawsuit against Ripple and its management with allegations of selling unregistered securities, a number of cryptocurrency companies have imposed restrictions on XRP transactions.
RippleNet General Manager Ashish Birla confirmed the changes in the model of working with MoneyGram, while expressing hope for continued cooperation. Even so, the users of the XRP money transfer solution remain “two dozen” companies, stressed is he.
Ripple officials said in a preliminary hearing on Monday that the SEC refused to notify exchanges and other market participants about XRP’s status as a security during numerous discussions in 2019 and earlier. Lawyers for Ripple CEO Brad Garlinghouse have already filed a motion to leave the claim without consideration, pointing out that he could not have known about the possibility of XRP being recognized as a security.
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