MoneyGram and Ripple Break off Partnership, Closing the Door to RippleNet and ODL for Now
The partnership will be revisited in the future, the CEO said, crypto regulation “needlessly muddied the waters.”
Ripple, the blockchain payment startup, is ending its partnership with money transfer services company MoneyGram International, the company said on Monday.
The reason behind terminating the agreement wasn’t specified, but Ripple Chief executive Officer Brad Garlinghouse said they both are committed to revisiting the partnership in the future.
Back in 2019, Ripple bought a $30 million stake in MoneyGram, with the partnership initially set for two years. The announcement says,
“We are proud of the work we were able to accomplish in a short amount of time, as well as the impact we were able to achieve in bringing this first-of-its-kind product to market. Together, we processed billions of dollars through RippleNet and On-Demand Liquidity (ODL).”
According to Asheesh Birla, GM of RippleNet and Board Observer MoneyGram, the product continues to grow with 2 new customers per week. This combined with “a strong balance sheet allowing us to expand ODL, and pilot new solutions like LOC.”
However, XRP enthusiasts are now asking about the change in the company's websites that now mentions hundreds of customers instead of 300+.
“Needlessly Muddied the Waters”
MoneyGram stopped transaction under its commercial agreement with Ripple in early December when the US Securities and Exchange Commission (SEC) charged Ripple and its top two executives, including Garlinghouse, with conducting a $1.3 billion unregistered securities offering. In a regulatory filing, MoneyGram also said that it would not receive any market development fees in 2021.
Garlinghouse said in a Twitter post that the lack of cryptocurrency regulation framework has “needlessly muddied the waters for U.S. businesses & consumers.”
In a recent interview, the CEO reiterated that if his San Francisco-based company loses the lawsuit, it will put the crypto industry in the US at a competitive disadvantage. He likened this to the U.S.' participation on the internet which has been “a source of massive profits” and “geopolitical strength” for the country.
The company filed its formal response last Thursday where it argues that XRP doesn’t require registration because it’s an asset and not a security.
Ripple also secured a separate legal victory against its UK-based investor, Tetragon Financial Group, when the Delaware court ruled that it cannot redeem its $175 million investment because of the SEC lawsuit.