Payment company MoneyGram, a partner of Ripple, became a defendant in the lawsuit due to its statements regarding the XRP token, writes Cointelegraph.
The class action lawsuit was filed on March 1 in California on behalf of investors who bought MoneyGram securities from June 17, 2019 to February 22, 2021. Plaintiffs allege that MoneyGram misrepresented the nature of its partnership with Ripple Labs and XRP’s status as a security.
In June 2019, MoneyGram announced that it would use XRP to exchange foreign currencies in international money transfers. However, on December 23, 2020, the company said it was independent of the Ripple service.
“MoneyGram does not use the ODL or RippleNet platform to directly transfer client funds in digital or other form. In addition, MoneyGram is not involved in the SEC’s claim, ”the firm said at the time.
MoneyGram suspended its partnership with Ripple in February, two months after the US Securities and Exchange Commission (SEC) filed a lawsuit against the XRP issuer for the illegal sale of $ 1.3 billion in securities.
According to the plaintiffs, MoneyGram did not warn investors about the possibility of recognizing XRP as a security and may lose an important source of income in the form of fees paid to it by Ripple.
“As a result, the public statements of the defendant were in fact inaccurate or misleading in all cases. The plaintiffs claim that they suffered losses when reliable information came to the market, ”the document says.
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