Ripple, MoneyGram End Years-Long Partnership
- Officially announced in June 2019, the partnership between the two firms has “processed billions of dollars through RippleNet and On-Demand Liquidity”.
- The fallout between the two firms did not come as a surprise, with MoneyGram having suspended its agreement with Ripple back in February.
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U.S. fintech firm Ripple and MoneyGram International (MGI) have “together decided to wind down” their relationship, and end their partnership, Ripple said in a press release on 8 March.
While the two companies have decided to end their relationship, Ripple stated they could still work together in the future, as they still believe in the ability of “digital assets and blockchain technology to change the status quo in global payments”. Ripple’s CEO, Brad Garlinghouse, said the partnership between the two firms had been quite successful so far — with them having “processed billions of dollars through RippleNet and On-Demand Liquidity” — despite the lack of crypto regulatory clarity in the U.S.. He tweeted:
“While the lack of a crypto reg framework has needlessly muddied the waters for U.S. businesses & consumers, there’s no denying what Ripple and MGI have achieved together. Billions of dollars have been sent and settled across borders through ODL w/ XRP.”
Even though Ripple and MGI first announced their strategic partnership in June 2019 — with Ripple investing $30 million in MGI, and MoneyGram agreeing to use XRP and xRapid for their settlement operations — the two firms have actually been working together since 2018. The partnership — that was meant to expire in 2023 — has so far netted MGI around $62 million in “market development fees” from Ripple.
Back in December 2020, the U.S. Securities and Exchange Commission filed a lawsuit against Ripple and its executives — alleging the firm had raised more than $1.3 billion in an “unregistered, ongoing digital asset securities offering” — which resulted in MGI suspending its agreement with Ripple in February.
While the SEC lawsuit had hurt Ripple’s business in the U.S. — with its native currency XRP getting delisted from a number of U.S. exchanges — it did not impact the Asia Pacific region. Last week, Garlinghouse commented that Ripple’s business in Asia and Japan has “continue to grow” all thanks to the “regulatory clarity” in those markets.
- A federal judge ruled that the sale of XRP through exchanges and algorithms did not qualify as selling securities, which could have a major impact on several SEC lawsuits.
- The institutional sale of the token, however, did violate federal securities laws, and the lawsuit between the SEC and Ripple will have to go to trial.
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- These documents are seen as central in Ripple’s battle against the SEC, which in 2020 accused the company of selling its XRP token without registering it as a security.
- The documents in question are internal emails, text messages, and expert reports that followed Hinman’s 2018 speech, in which he said ETH and BTC were not securities.
- The exchange argues that the SEC failed to provide a “fair notice” that selling XRP was illegal, and that it previously made public statements that those transactions were lawful.
- Coinbase also pointed out that the SEC is yet to provide clear guidance to crypto businesses, and that it keeps being inconsistent about its enforcement approach.