Global money transfer service MoneyGram says it has officially suspended its partnership with blockchain payments firm Ripple amid the latter’s litigation with the SEC.
According to MoneyGram’s quarterly outlook, the company is “not planning for any benefit from Ripple market development fees” for Q1 2021. MoneyGram said it had a more than $12 million net expense benefit from Ripple in the same quarter last year.
“Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripple’s platform,” said MoneyGram.
The collaboration between the two firms largely began three years ago, when MoneyGram integrated XRP into its payment system. The following year, Ripple and MoneyGram entered into a partnership for cross-border payments and foreign exchange settlements with digital assets.
Ripple followed through with a $50 million investment in November 2019 in exchange for a 10% stake in the company. As of December, the firm has sold roughly $15 million of the MoneyGram stock.
However, amid the news in December that the U.S. Securities and Exchange Commission would be taking legal action against Ripple as well as its CEO Brad Garlinghouse, and co-founder Christian Larsen, MoneyGram has seemingly attempted to distance itself from the firm. A few days after the SEC announcement, MoneyGram said it had never utilized Ripple’s On-Demand Liquidity and RippleNet services “for direct transfers of consumer funds.”
MoneyGram is not the only firm to react to the SEC’s lawsuit against Ripple. Many crypto exchanges have already delisted or suspended trading for the XRP token. Although the fallout from the lawsuit initially caused the XRP price to drop, the token has largely recovered in two months, and is currently $0.5975 at the time of publication.