Ripple’s strategic partner MoneyGram has announced the suspension of its partnership with the cross-border payment firm, citing the ongoing lawsuit between the firm and the United States Securities and Exchange Commission (SEC).
The new development was revealed in the money transfer giant’s quarterly earnings report.
The report reads in part as follows:
“In addition, the Company is not planning for any benefit from Ripple market development fees in the first quarter. Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripple’s platform. In the first quarter of 2020, the Company realized a net expense benefit of $12.1 million from Ripple market development fees.”
It can be recalled that the SEC filed a lawsuit against Ripple and two of its top executives on 22nd December 2020 for alleged sales of XRP it classified as an unregistered security for about seven years.
After the filing of the lawsuit was brought to the notice of the public, MoneyGram claimed that it would continue to monitor the situation.
A positive vibe surfaced in the XRP community after the first pretrial conference on the lawsuit. Lawyer Matthew Solomon, who represents CEO Brad Garlinghouse said he has evidence to prove that the SEC failed to warn exchanges about the security status of XRP when were opportunities to do so.
Despite this revelation, MoneyGram’s recent remark shows that the significant partnership between the two companies has been suspended indefinitely.
In June 2019, Ripple sealed a strategic partnership with MoneyGram. The San Francisco based payment firm described the partnership in a blog post as follows:
“Through this partnership, which will have an initial term of two years, Ripple would become MoneyGram’s key partner for cross-border payment and foreign exchange settlement using digital assets. In conjunction with the partnership, Ripple has agreed to provide a capital commitment to MoneyGram, which enables the company to draw up to $50 million in exchange for equity over a two-year period.“