Ripple’s decision to end its partnership with remittance company MoneyGram did not come as a shock to most people as the two firms have been facing some internal issues since SEC’s suit. While XRPs have finally started returning to place after the continuous decline, things are not the same with MoneyGram. Recently, new shareholders of the firm sued the company for allegedly misstating the cross-border token’s legal status, XRPs.
The US regulatory body, Securities and Exchange Commission, had said that Ripple’s executives had sold unregistered tokens to people, which violated some federal laws. The court battle might be coming to a close as close sources opined that the newly appointed SEC executives would take a different approach to the case compared to Trump’s administration officials.
Ripple ends partnership with MoneyGram
This might be the end to a successful partnership as embattled fintech firm Ripple decided to stop the collaboration. Similarly, MoneyGram had announced a temporary stop to the partnership in February, showing that its interests were to end the partnership.
The problems started when the regulatory body opined that XRPs were securities and that Ripple infringed on investors’ rights by not registering it as a security with SEC. The firm’s CEO, Brad Garlinghouse, called XRPs digital currencies and not securities and does not share characteristics with securities.
The entrepreneur’s lawyer had argued that the tokens were for cross-border payments and that they are not considered securities by many. The counsel had revealed that FinCEN required Ripple to put up anti-money laundering measures for the currencies, which is unusual for securities.
Not many people can blame MoneyGram for its announcement, where it detached itself from the ongoing regulatory problems Ripple faced. Many prominent exchanges had delisted XRP at the time, with Coinbase and Binance taking the lead. Understandably, MoneyGram distanced itself from the allegations to prevent a lawsuit against itself.
Both firms might revisit the partnership in the future
During the suit’s early days, the money transfer company had assured the public that it was still partners with Ripple but watched the suit very closely. It added that it was also looking for a way forward to put the suit to rest. While the news of ending the partnership has been unofficial, Ripple has finally made everything official by sharing a press release explaining that it no longer partners with the money transfer firm.
Before the firms became partners, Ripple had to give MoneyGram some money to seal the deal. What is now unsure to the public is how the settlements between the firms would come to place.
The executive explained that his firm and MoneyGram are winding down their partnership while still committed to revisiting it in the future. Although people understand that things have not been smooth between the two businesses, they did not expect the legal battle to end a lucrative partnership.
Even shareholders at MoneyGram understand the firm’s profits from the collaboration when it sued the firm for causing the loss of a significant income avenue.
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