After Ripple Labs, payments giant MoneyGram is the latest to find itself at the end of a legal entanglement, with a class-action lawsuit filed on the 1st of March claiming that MoneyGram misrepresented its relationship with Ripple, and by extension, XRP.
The lawsuit in question, filed on behalf of purchasers of the securities of MoneyGram International, Inc. between 17 June 2019 and 22 February 2021, alleges that the payments firm repeatedly “made false and/or misleading statements” regarding its relationship with the blockchain firm. According to the same, MoneyGram failed to properly disclose that the SEC sees XRP, a cryptocurrency utilized by MoneyGram as part of its relationship with Ripple, as an unregistered security.
Contending that the plaintiffs suffered damages, the lawsuit also alleges that MoneyGram did not disclose,
“…. in the event that the SEC decided to enforce the securities laws against Ripple, MoneyGram would be likely to lose the lucrative stream of market development fees that was critical to its financial results throughout the Class Period.”
The class-action case filed by Rosen Law Firm comes at an interesting time, especially since over the past few months, MoneyGram has done its best to distance itself from Ripple, XRP, and the legal issues they are facing.
Consider this – Back when the partnership between Ripple and MoneyGram was first announced, the latter claimed that it will be utilizing “Ripple’s xRapid product, leveraging XRP in foreign exchange settlement as part of MoneyGram’s cross-border payment process.”
Fast-forward to December 2020, however, and MoneyGram was quick to say that it is not dependent on Ripple for its FX trading needs. Two months later, it went as far as suspending its partnership with Ripple citing uncertainty around the ongoing litigation with the SEC.
At this time, it is still unclear what the latest lawsuit means for Ripple and XRP’s ecosystem.