MoneyGram no longer uses Ripple XRP
Ripple Labs and MoneyGram have ended their cooperation and are going their separate ways for the time being. The reason for this is The News Spy likely to be the ongoing proceedings against Ripple Labs by the US Securities and Exchange Commission.
Ripple Labs announced on 8 March that it had terminated its contract with the financial company MoneyGram. MoneyGram, in turn, had already declared about a fortnight ago that it would no longer use Ripple Labs‘ platform.
Ripple Labs‘ announcement on 8 March said:
Ripple [Labs] and MoneyGram have jointly made the decision to terminate our current partnership agreement.
Why does MoneyGram want to stop using Ripple XRP?
Ripple Labs and MoneyGram began working together in 2019, and MoneyGram is in the foreign remittance business. Therefore, Ripple’s „xRapid“ was naturally the ideal solution for MoneyGram to offer an even faster and cheaper service. XRapid is based on the Ripple cryptocurrency XRP and enables lightning transfers across borders.
The reason for the current termination of the cooperation is likely to be the proceedings of the US Securities and Exchange Commission (SEC) against Ripple Labs, which began in December 2020. MoneyGram presumably wants to protect itself from consequential damages should Ripple Labs be defeated by the SEC.
When the SEC proceedings against Ripple Labs became public, MoneyGram had still taken a wait-and-see attitude. However, the company has apparently changed its mind in the meantime.
Other companies have also already separated from Ripple Labs or no longer offer the sale of the cryptocurrency Ripple XRP. These include, for example, the crypto exchanges Coinbase, Binance and Kraken.
What are the SEC’s proceedings against Ripple Labs about?
In December 2020, the SEC had filed a case against Ripple Labs in the U.S. District Court for the Southern Areas of New York. The case concerned the sale of the cryptocurrency Ripple XRP. The SEC assumes that Ripple’s XRP tokens are actually securities from a legal perspective. Ripple Labs has been selling these securities since 2013 without the necessary prior registration with the SEC.
Ripple Labs has long contradicted this line of thought and does not consider its XRP tokens to be securities. Rather, Ripple XRP is a fully functioning currency and a better alternative to Bitcoin (BTC).
What does the future hold for MoneyGram and Ripple XRP?
Despite the current termination of the business relationship, Ripple Labs and MoneyGram are apparently keeping a backdoor open for a new partnership in the future. For example, the third paragraph of Ripple Labs‘ announcement on 8 March states:
We are both committed to re-examining our relationship in the future.