MoneyGram, the global money transfer service, has changed its relationship with blockchain payments firm Ripple amidst Ripple’s litigation with the Securities and Exchange Commission (SEC).
It has been reported that the company is “not planning for any benefit from Ripple market development fees” for the first quarter of 2021.
However, MoneyGram said that it had a more than $12 million net expense benefit from Ripple in the same quarter last year.
More trouble for Ripple is on the horizon. @Moneygram has put its relationship with the Ripple Labs on hold, as the SEC’s investigation continues. Many exchanges have already ceased trading XRP amidst the regulatory uncertainty. https://t.co/z4sjB9j3iB — Cointelegraph (@Cointelegraph) February 23, 2021
“Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripple’s platform.”
The collaboration between the two firms largely began three years ago, when MoneyGram integrated XRP into its payment system. The following year, Ripple and MoneyGram entered into a partnership for cross-border payments and foreign exchange settlements with digital assets.
It has been analyzed that Ripple followed through with a $50 million investment in November 2019 in exchange for a 10% stake in the company. As of December 2020, the firm has sold around $15 million of the MoneyGram stock.
Amidst the news in December 2020 that the US Securities and Exchange Commission would be taking legal action against Ripple as well as its CEO, Brad Garlinghouse, and co-founder Christian Larsen, MoneyGram has seemingly attempted to distance itself from the firm.
MoneyGram said that it had never utilized Ripple’s On-Demand Liquidity and RippleNet services “for direct transfers of consumer funds.”
Thus, along with MoneyGram, many crypto exchanges have already delisted or suspended the trading of the XRP token.