Ripple and MoneyGram: Partnership Winding Down Amid Regulatory Turmoil

Partnership on Hold

In a surprising turn of events, Ripple CEO Brad Garlinghouse has announced the fintech firm and MoneyGram International have decided to wind down their partnership. The statement, released on March 8, left a glimmer of hope as both organizations expressed interest in possibly rekindling their relationship in the future.

Achievements Together

Despite this tumultuous split, Garlinghouse highlighted their remarkable journey together, stating they’ve processed billions of dollars through Ripple’s innovative services, RippleNet and On-Demand Liquidity (ODL). He mentioned,

“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.”

U.S. Regulatory Landscape

Garlinghouse has been vocal about the detrimental effects U.S. regulation has had on the crypto space. He lamented the lack of clear guidelines from lawmakers, claiming,

“That’s why I say this isn’t just bad for Ripple, it’s bad for crypto broadly here in the United States. And it’s driving that activity, it’s driving that entrepreneurial activity outside the United States.”

Ouch! Talk about throwing shade at the government!

Time to Cut the Cord

The partnership began officially in June 2019, but MoneyGram had incorporated Ripple’s xRapid into its cross-border payments process even earlier, back in 2018. With the partnership set to expire in 2023, it seemed like a comfortable arrangement—until it wasn’t. The dominoes began to fall when MoneyGram suspended the relationship in late February, following a complaint filed by the U.S. SEC against Ripple Labs citing securities violations.

Class-Action Chaos

As if the situation wasn’t complicated enough, MoneyGram found itself caught in legal turmoil over alleged false statements regarding its collaboration with Ripple. A class-action lawsuit was filed in a California court by law firm Rosen, representing investors who felt misled while purchasing MoneyGram’s securities between mid-2019 and early 2021. You could say the drama is as intense as a soap opera!

Market Reactions

As the dust settled, the markets reacted swiftly: MGI’s stock dropped by 9% in after-hours trading, while XRP ticked upwards by 2%, holding steady at $0.48. The balancing act of crypto is never dull, is it?