The global money transfer service MoneyGram says that it changed its relationship with the blockchain payment company Ripple after a lawsuit with the Securities and Exchange Commission.
According to MoneyGram’s quarterly forecast, the company does not plan to pay dividends on the development fee for the Ripple market in the first quarter of 2021. MoneyGram said it received over $ 12 million in net consumption from Ripple in the same quarter last year.
“Due to the uncertainty surrounding the ongoing lawsuit with the Securities and Exchange Commission, the company has closed trading on the Ripple platform,” MoneyGram said.
The collaboration between the two companies initially started three years ago, when MoneyGram integrated XRP into the payment system. The following year, Ripple and MoneyGram entered into a partnership for cross-border payments and currency settlements with digital assets.
Ripple followed suit, investing $ 50 million in November 2019 in exchange for a 10% stake in the company. As of December 2020, the company has sold MoneyGram shares worth $ 15 million.
However, amid news in December 2020 that the US Securities and Exchange Commission will sue Ripple as well as CEO Brad Garlinghouse and co-founder Christian Larsen, it looks like MoneyGram has tried to distance itself from the company. Days after the SEC’s announcement, MoneyGram said it had never used Ripple’s Liquidity On Demand and RippleNet’s services for “direct consumer money transfers.”
MoneyGram is not the only company responding to the SEC’s lawsuit against Ripple. Several cryptocurrency exchanges have already suspended or suspended XRP token trading. Although the aftermath of the lawsuit originally drove the price of XRP down, the token has largely recovered in two months and is currently at $ 0.5975 at the time of publication.