Ripple CEO Brad Garlinghouse has issued a statement announcing the fintech firm and MoneyGram International have together decided to “wind down” their partnership.
However, the March 8 statement noted that both companies are committed to revisiting some form of partnership together in the future.
Garlinghouse noted that together, Ripple and MoneyGram International (MGI) processed billions of dollars through Ripple’s RippleNet and On-Demand Liquidity (ODL) services, stating:
“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.”
The Ripple CEO has repeatedly accused U.S. lawmakers of stifling the crypto sector by failing to establish clear regulatory guidelines. Speaking to financial outlet Axios on March 8, he asserted the U.S. government’s assertion that Ripple’s XRP token is a security has negative impacts for the crypto industry at large, stating:
“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.”
The strategic partnership between the two firms was officially announced in June 2019, but MoneyGram had been utilizing Ripple's xRapid product as part of its cross-border payments process since early 2018. The agreement between the two companies was due to expire in 2023.
However, MGI suspended the partnership with Ripple in late February after the U. S. SEC filed a complaint against Ripple Labs alleging securities violations in December 2020. That same month, the payments firm stated that it does not utilize the ODL platform or RippleNet for direct transfers of consumer funds and is not a party to the SEC action.
In early March, MoneyGram was sued in a California court over alleged false statements made regarding its partnership with Ripple Labs and XRP cryptocurrency. The class-action lawsuit was submitted by law firm Rosen on behalf of investors who purchased securities from MoneyGram between June 17, 2019 and February 22, 2021.
At the time of writing, MGI stock had fallen 9% in after-hours trading while XRP was up 2% on the day at $0.48.