MoneyGram International has been drawn into a class action lawsuit by investors who purchased securities from the company between June 17, 2019, and February 22, 2021. According to the lawsuit, the payment company is being sued for alleged false statements, made regarding its partnership with Ripple Labs and their XRP cryptocurrency.
The grievance of the investors are tied to the fact that MoneyGram, when the announcement of its partnership with Ripple was made, said that it would be using the crypto company’s xRapid product, and it would also “leverage (on) XRP in foreign exchange” transactions as part of its cross-border payment process. However, when it became imminent that the Securities and Exchange Commission (SEC) was going to be suing Ripple Labs because of its XRP token which it claims is a security, the traditional financial institution changed tune.
On December 23, MoneyGram stated that it was not dependent on the xRapid product which has been rechristened to On-Demand-Liquidity (ODL) or RippleNet for its foreign transactions. The firm also recently suspended its partnership with the crypto firm over its lawsuit with the financial regulator.
This is the main issue the investors are holding on to, they believe that MoneyGram failed to disclose that the XRP token was viewed as an unregistered and unlawful security by the authorities.
