Global money transfer service MoneyGram said it had changed its relationship with blockchain payments firm Ripple amid the latter’s litigation with the Securities and Exchange Commission.
According to MoneyGram’s quarterly outlook, the company “does not plan to profit from Ripple’s market development costs” for the first quarter of 2022. MoneyGram said it had a net cost advantage of over $12 million over Ripple in the same quarter last year.
“Due to uncertainty regarding their ongoing litigation with the SEC, the Company has suspended trading on the Ripple platform,” MoneyGram said.
The collaboration between the two companies largely started 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 up with a $50 million investment in November 2022 in exchange for a 10% stake in the company. As of December 2022, the company had sold approximately $15 million of MoneyGram’s stock.
However, amid news in December 2022 that the US Securities and Exchange Commission would be taking legal action against Ripple as well as its CEO, Brad Garlinghouse, and co-founder Christian Larsen, MoneyGram appears to be trying to distance itself from the company. Days after the SEC’s announcement, MoneyGram said it had never used Ripple’s Liquidity On Demand and RippleNet services “for direct transfers of consumer funds.”
MoneyGram isn’t the only company reacting to the SEC’s lawsuit against Ripple. Many crypto exchanges have removed or suspended trading of XRP tokens. Although the impact of the lawsuit initially caused the price of XRP to drop, the token has mostly recovered in two months and is currently at $0.5975 at the time of publication.