Ripple, MoneyGram end partnership citing ‘lack of crypto reg framework’
Ripple and MoneyGram have ended their partnership agreement, according to an announcement made earlier today. However, according to Ripple CEO Brad Garlinghouse, the two parties remain “committed to revisiting our relationship in the future.”
Makes no sense this close to the finish line unless the “current partnership agreement” is a conflict of interest for Ripple moving forward…
— Mr. B XRP (@XrpMr) March 8, 2021
The decision to cut ties with each other came on the back of MoneyGram suspending its trading activities on Ripple’s On-Demand Liquidity (ODL) platform on 23 February, a decision MoneyGram made after citing “uncertainty” caused by the SEC’s lawsuit against Ripple Labs.
Interestingly, since the 1st of March, MoneyGram has also found itself at the receiving end of a lawsuit, one alleging that MoneyGram misrepresented its relationship with Ripple, and by extension, XRP.
The said lawsuit was filed on behalf of those who purchased MoneyGram shares between 17 June 2019 and 22 February 2021. It alleged that the company repeatedly made false and/or misleading statements regarding its relationship with Ripple, while also failing to disclose that the SEC views XRP as an unregistered security.
After first announcing its partnership with Ripple in June 2019, XRP has accounted for between 10-20% of MoneyGram’s ODL transactions across most cross-border payment corridors.
In fact, Ripple also paid over $41 million in “Market Development Fees” to MoneyGram over the last financial year. However, it’s worth mentioning that the company argued that they sell all XRP paid to them by Ripple as soon as they receive it.
The regulatory challenges faced by the two companies seem to be the root cause of the partnership’s demise – a point noted by Garlinghouse. The Ripple exec claimed on Twitter,
“While the lack of a crypto regulatory framework has needlessly muddied the waters for U.S. businesses & consumers, there’s no denying what Ripple and MGI have achieved together. Billions of dollars have been sent and settled across borders through ODL with XRP.”
XRP was up by 2.9% in the last 24-hours, with the altcoin trading at around $0.4802, at press time.