Remittance firm MoneyGram suspends trading on Ripple’s payment platform, RippleNet, citing the ongoing $1.3bn lawsuit filed by the U.S. Securities and Exchange Commission (SEC) which alleged unregistered securities sales of XRP.
The money transfer company said its “not planning for any benefit from Ripple market development fees” in the first quarter of 2021, a big step down from last year’s Q1 when it banked $12.1m from the Ripple market.
Commenting on this news, Ripple said this suspension is temporary. “We signed a multi-year contract in 2019 with MoneyGram, which is still in place and is not limited to their use of ODL [on-demand liquidity solution]. Together we are actively leveraging and exploring alternative use cases.”
It added, “We look forward to finding a path forward with MoneyGram and have confidence that there will be more regulatory clarity in the U.S. for the use of digital assets and blockchain technology at the end of this lawsuit.”
Ripple had entered into a partnership with MoneyGram in 2019, which was supposed to be valid until 2023, where Ripple paid $50.2m and $11.3m in 2020 and 2019, respectively, to MoneyGram.
This allowed MoneyGram to use the XRP token for cross-border payment and foreign exchange settlement. Since then, MoneyGram netted $61.5m in “market development fees” from the crypto firm. In addition, Ripple also pumped an investment worth $50m into MoneyGram.
MoneyGram is hardly alone in pulling out of its partnership with Ripple after the SEC’s lawsuit. A slew of firms in the crypto space paused and some even ceased all activities related to XRP. For instance, crypto users can no longer trade XRP on exchanges such as Binance.US, Coinbase, OkCoin and Blockchain.com, among many others.
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