Ripple and MoneyGram have terminated their partnership. The two firms have been working together for less than two years now on a remittance service. However, MoneyGram suspended the use of XRP as a remittance currency in February due to Ripple’s legal woes.
Ripple CEO Brad Garlinghouse confirmed the end to the partnership on Twitter.
Today, we’re announcing that Ripple and MGI have together decided to wind down our current partnership agreement, and are both committed to revisiting it in the future. See our full statement: 1/2 https://t.co/KGOzPWuThR
— Brad Garlinghouse (@bgarlinghouse) March 8, 2021
In an accompanying statement, Ripple claimed that the decision to end the relationship was mutual. “We are proud of the work we were able to accomplish in a short amount of time, as well as the impact we were able to achieve in bringing this first-of-its-kind product to market. Together, we processed billions of dollars through RippleNet and On-Demand Liquidity (ODL),” Ripple stated.
Ripple’s ODL relies on XRP for transfers, focusing primarily on cross-border remittances. MoneyGram partnered with Ripple in 2019 to use the service as part of its transfer solutions. The Nasdaq-listed firm has been making millions of dollars from Ripple as a result. In less than two years, it has received $61.5 million in “market development fees.”
“We are both committed to revisiting our relationship in the future. We still believe in the promise of digital assets and blockchain technology to change the status quo in global payments for the benefit of billions of consumers around the world,” Ripple concluded in its statement.
Garlinghouse criticized the lack of a digital currency regulatory framework in the U.S., which he believes has “muddied the waters for U.S. businesses and consumers.” Nevertheless, he claimed that the partnership between the two firms has been beneficial to consumers, enabling them to transfer billions of dollars.
Unending legal woes
The end to its partnership with MoneyGram is just one of several woes that Ripple is facing. Its legal battle with the SEC is its biggest headache. The implications, if it lost to the regulator, are epic. It would have to pay a huge fine and even more critically, exit the U.S. market.
A ripple effect of losing the SEC case would be the implications it would have on yet another legal battle the firm is engaged in with one of its investors. Tetragon, the lead investor in Ripple’s $200 million Series C funding round, had taken the company to court seeking to reclaim its investment.
As per their agreement, Tetragon is entitled to reclaim its investment if XRP is determined to be a security. However, a Delaware court ruled that the XRP lawsuit is far from over and that Tetragon has to await the trial.
In a statement following the court ruling, Ripple blasted Tetragon, stating, “Let’s call Tetragon’s lawsuit what it is — an opportunistic move to take advantage of the SEC’s allegations.”
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