In light of the legal battle between Ripple and the Securities and Exchange Commission (SEC), MoneyGram has announced its decision to suspend its trading activities on the platform of the crypto company citing the “uncertainty” surrounding the firm due to its lawsuit with the regulators.
MoneyGram and Ripple had entered into a partnership in 2019 and it was scheduled to end by 2013. The partnership had led to the embattled company investing $50 million in the payment remittance financial institution. MoneyGram, on the other hand, had been leveraging RippleNet’s infrastructure for forex settlements as part of its cross-border payments process. Furthermore, Ripple was paying the financial institution millions as “market development fees.”
The suspension of the use of the crypto company’s platform means that MoneyGram is “not planning for any benefit from Ripple market development fees in the first quarter.” The firm also highlighted that it had realized “a net expense benefit of $12.1 million from Ripple market development fees” in 2020.
This new development is not entirely surprising as different firms have distanced themselves from the crypto company due to the lawsuit. In an earlier statement released by MoneyGram, the company had said it was not a party to the case and that it was going to keep an eye on the potential impact of the lawsuit on its operations.
Ripple Steps up Defense Against SEC
Ripple, in its bid to step up its defense against the financial regulator, has brought in the former chairman of the commission, Mary Jo White, to help it fight its battle against the authorities.
It is expected that White would bank on her experience as a former chairman of the regulatory body and also her experience as a U.S. attorney at the Southern District of New York would come in handy.
The crypto firm’s executives, Brad Garlinghouse and Chris Larsen, have already kickstarted plans to dismiss the lawsuit against them. In the pre-trial conference held today, lawyers of the executives pointed out that the “commission had failed to warn market actors, including exchanges, about XRP’s securities status in numerous discussions that took place in 2019 and earlier.”