The US-based money transfer company MoneyGram has suspended its relationship with Ripple Labs, citing the legal uncertainty surrounding the company. In its latest earnings report, the Dallas, Texas-based firm said it would no longer be using Ripple’s XRP remittance solution until the payments firm sorts out its legal issues with the U.S. Securities and Exchange Commission (SEC). MoneyGram partnered with Ripple in January 2018, becoming one of the first payments service providers to pilot Ripple’s xRapid solution.
MoneyGram has suspended Ripple services after three years.
MoneyGram partnered with Ripple in January 2018, becoming one of the first payments service providers to pilot Ripple’s xRapid solution. xRapid allows companies to transfer funds across borders using XRP without the need for pre-funded nostro accounts. Three years later, MoneyGram has suspended the service. In its 2020 financial results report. “In addition, the company is not planning for any benefit from Ripple market development fees in the first quarter. Due to the uncertainty concerning their ongoing litigation with the SEC, the company has suspended trading on Ripple’s platform,” MoneyGram said in an official statement.
SEC filed a lawsuit against Ripple over unregistered XRP sale.
The partnership between the firms has been benefitting MoneyGram, with Ripple paying the company to use the XRP token. In Q4 2020, Ripple paid MoneyGram $9.2 million for “market development fees.” Altogether, in 2019 and 2020, MoneyGram received $61.5 million from Ripple to continue using XRP. Earlier, the US SEC filed a lawsuit against Ripple alleging that the firm conducted an unregistered security sale of XRP. However, Ripple has denied all the allegations and is fighting the lawsuit. MoneyGram is the latest company to drop Ripple’s services following its lawsuit by the SEC. Several US-based crypto exchanges already halted XRP trading on their platforms.