MoneyGram forfeits Ripple’s money because of the SEC complaint against the company and its XRP token. There is simply too much incertainty about the future of Ripple.
After the SEC’s complaint against Ripple and its executives, the reaction of the major exchanges was not long in coming. They chose to remove the XRP from their platforms as a precautionary measure against possible lawsuits.
MoneyGram, a money transfer specialist and Ripple’s client/partner, however, delayed. But since then, the US stock exchange regulator has completed its grievances against the firm. And the accusations are heavy.
MoneyGram therefore chooses to withdraw, at least temporarily, from its agreement with Ripple. This collaboration had now lasted for 3 years. As part of this, the payment service integrated XRP into its payment system.
In return, it received significant amounts in cryptocurrencies. MoneyGram decided to cancel the agreement for legal reasons. In its financial forecasts, the company states that it “does not expect to benefit from Ripple’s market development costs”.
This decision concerns the first quarter for the time being. The shortfall therefore amounts to several million dollars. A year earlier, MoneyGram received $12 million in net fees from Ripple.
“Due to the uncertainty regarding their ongoing dispute with the SEC, the company has suspended trading on Ripple’s platform,” says the payments facilitator. This is a serious setback for crypto, which recently boasted of winning new customers.
Already in December, MoneyGram seemed to distance itself from its troublesome partner. The latter wanted to make it known that it had never used the On-Demand Liquidity and RippleNet services “for the direct transfer of consumer funds”.
Ripple, on the other hand, was a liquidity provider and investor for MoneyGram. In November 2019, the company received $50 million in exchange for a 10% stake in its capital.
At the end of 2020, however, Ripple reduced its stake by one third. The firm refused to accept any exit, ensuring that it was simply a good financial transaction. The capital gain on the shares exceeded 200%.
The latest accusations of the SEC now sound like a coup de grâce in the relationship between the two companies. The stock exchange regulator reproaches in particular Bradley Garlinghouse and Christian Larsen for manipulating the XRP’s prices.