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Ripple and MoneyGram wind down partnership

Ripple and MoneyGram wind down partnership

As it faces up to litigation with the Securities and Exchange Commission, Ripple says its partnership with MoneyGram is over.

The formal end of the partnership comes a month after MoneyGram suspended trading on Ripple's platform over concerns about the latter's legal tussle with the SEC.

In 2019 Ripple agreed to invest up to $50 million in MoneyGram as part of a two-year partnership that has seen the old-school money transfer player tap the blockchain startup's XRP digital currency for cross-border payment and foreign exchange settlement.

Ripple has effectively been paying MoneyGram to use its on-demand liquidity service, with the money transfer outfit seeing a "net expense benefit" of $12.1 million from Ripple market development fees in the first quarter of 2020.

However, late last year the SEC filed a regulatory lawsuit against Ripple Labs Inc. and two of its executives, alleging that they "raised over $1.3 billion through an unregistered, ongoing digital asset securities offering".

The complaint mentions the MoneyGram arrangement, although not the company by name, saying: "The Money Transmitter became yet another conduit for Ripple’s unregistered XRP sales into the market, with Ripple receiving the added benefit that it could tout its inorganic XRP ‘use’ and trading volume for XRP."

In a statement, Ripple now says the agreement with MoneyGram is over but adds that both firms are "committed to revisiting our relationship on the future".

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