MoneyGram has officially cut ties with Ripple Labs in light of an ongoing legal fight with the US Securities & Exchange Commission.
In December, Nasdaq-listed MoneyGram was already suspended using Ripple’s under-fire XRP token in forex settlements as part of its cross-border payments process. Ripple had provided incentives to the Dallas-based money-transfer company to use its on-demand liquidity service as part of an agreement signed in 2019.
MoneyGram revealed it had netted more than $60 million in fees from using XRP transfers as an alternative source of revenues in payment and settlement services. At the time, Ripple responded to MoneyGram’s revelation, claiming the suspension was just temporary and that their parentship extends beyond the use of its network.
Ripple announced in a statement,
“Together, Ripple and MoneyGram have made the decision to end our current partnership agreement. We are proud of the work we were able to accomplish in a short amount of time, as well as the impact we were able to achieve in bringing this first-of-its-kind product to market. Together, we processed billions of dollars through RippleNet and On-Demand Liquidity (ODL).”
MoneyGram Mentioned in XRP Case
XRP price has shown a muted reaction to the news. Nevertheless, it holds 2% gains today even as the money transfer giant is explicitly distancing itself from the 7th-largest cryptoasset by market capitalization.
The decision, understandably, was made in the light of the SEC filing against Ripple, which alleges that XRP is a security. Both companies, however, said they are committed to revisiting their relationship in the future. Still, this will not happen until the legal rift between Ripple and US regulators clears up.
The SEC’s complaint already mentions the MoneyGram involvement, describing the money transfer outfit as yet another “conduit for Ripple’s unregistered XRP sales into the market.”
MoneyGram used Ripple’s on-demand liquidity product, xRapid, to make blockchain payments commercially available. The partnership fit in nicely with Ripple’s big plan to become the crypto payment solution of choice not just on the web but also through brick-and-mortar transfer providers.
The San Francisco-based startup suggested that the blockchain project could eventually be extended worldwide.