For Ripple, MoneyGram had been a reference customer for the use of XRP in a partnership since summer 2019. Now, Ripple and MoneyGram are parting ways amid the SEC’s lawsuit over XRP.

When Ripple entered into an official partnership with the financial services provider MoneyGram in June 2019 and also invested $50 million in the process, hopes were high: MoneyGram, with its international core business of cross-border money transfers, was to demonstrate that it was possible to score points in this business through the use of Ripple’s cryptocurrency XRP. Faster and cheaper transfers were supposed to be made through XRP at MoneyGram. Now Ripple and MoneyGram are going their separate ways again. In a press release, it briefly says that the decision was made by mutual agreement.

Both sides plan to revisit their relationship in the future, according to vague reports.

Is XRP becoming the end game for Ripple?

The SEC has cited at least $1.3 billion as the amount of damages for the unauthorized sale of XRP. Even if Ripple could raise such an amount – XRP would then probably be a thing of the past.

Thus, Ripple’s hopes for survival cling to winning in the case against the SEC or at least finding a workable compromise. The case is yet to be heard on the merits.

Meanwhile, XRP is holding at levels just under $0.50.

Whether XRP as always thought at MoneyGram played an important role at all is unclear. After all, MoneyGram most recently reported that it already handles 30 percent of its transfers digitally (P2P), and apparently does so without any problems without XRP.

Already in February 2021, MoneyGram had stopped the use of XRP completely, referring to the ongoing legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC) as justification.

The SEC wants to prove that XRP was sold by Ripple under false pretenses.
The SEC classifies XRP as securities and believes that therefore investors were not adequately informed about XRP and that there was no authorization. Ripple rejects the allegations, but is losing support.
XRP was delisted from major crypto exchanges in the U.S. and now MoneyGram is dropping as well. MoneyGram did not separately comment on the announcement about the end of its partnership with Ripple.
What will happen to Ripple’s block of shares in MoneyGram initially remained open.

This partnership also provides MoneyGram with the opportunity to improve operating efficiencies and increase earnings and free cash flow.”

Through this strategic partnership, MoneyGram will be able to settle key currencies and match the timing of funding with its settlement requirements, reducing operating costs and working capital needs.

“This is a huge milestone in helping to transform cross-border payments,” said Brad Garlinghouse, CEO of Ripple. “MoneyGram is one of the largest money transfer companies in the world and the partnership will continue to further the reach of Ripple’s network. I look forward to a long-term, very strategic partnership between our companies.”

MoneyGram said in Monday’s announcement that it is nearing a refinancing of a loan and revolving credit facilities in the wake of the investment.

MoneyGram International Inc, the two companies said on Monday, as they partner to use Ripple’s product for cross-border payment and foreign exchange settlement.

Ripple bought MoneyGram’s stock at $4.10 per share, representing a premium of about 183% to its Monday closing price. The partnership will initially be for two years, MoneyGram said.

Shares of MoneyGram surged about 77% to $2.56 after the closing bell.

Ripple may also buy additional common stock or warrants for up to $20 million at a minimum price of $4.10 per share, MoneyGram said.

The partnership will focus on Ripple’s xRapid, a platform for cross-border payments that uses XRP, a virtual currency powered by blockchain to send and receive currencies.

“Through Ripple’s xRapid product, we will have the ability to instantly settle funds from U.S.

The payment giant was previously paid by Ripple to leverage XRP for remittance services. This has resulted in $61.5 million of profit through market development fees for the money sender.

MoneyGram utilized Ripple’s technology to settle real-time payments in foreign exchanges in a secure manner. XRP was used to convert foreign currencies such as Mexican pesos, Philippine pesos, Australian dollars and Euros, to currencies of another country at a low cost via blockchain.

Throughout MoneyGram and Ripple’s partnership from 2019 to 2020, XRP was utilized on MoneyGram’s network to facilitate money transfers.

MoneyGram has announced that it will temporarily be suspending the use of XRP and stepping back from its partnership with Ripple Labs, as the blockchain startup’s future remains uncertain due to the SEC complaint directed towards them.

Ripple’s partnership with MoneyGram began in June 2019 and was supposed to extend until July 2023. Ripple had previously paid MoneyGram to leverage XRP for international and cross-border payments, and this has been ongoing since the established pilot agreement between the two companies began in 2018.

Since the agreement, MoneyGram has made $61.5 million in market development fees thanks to Ripple.

Out of this, 80 percent of the transactions occurred on mobile devices, a trend that has been surging for the past couple of years.

An official newsletter from the company stated that recent consumer behavior was driven by 3.2 billion smartphone users with increased global migration techniques. Alex Holmes, the Chief Executive Officer [CEO] of MoneyGram a major proponent of the Ripple partnership said:

As part of our digital transformation, we’re on a mission to mobilize the movement of money.
The success of our mobile application throughout the year, and especially during the holiday season, demonstrates the value consumers place not only on our user experience but also on our global distribution network.”

Since the partnership with Ripple, MoneyGram has reported strong numbers.

February 22 of this year is entitled to compensation, seeing as MoneyGram is partnered with Ripple – the fintech firm behind the creation of XRP who is currently being sued by the SEC for offering unregistered securities through XRP.

Per the complaint:

“Defendants made false and/or misleading statements and/or failed to disclose that XRP, the cryptocurrency that MoneyGram was utilizing as part of its Ripple partnership, was viewed as an unregistered and therefore unlawful security by the SEC.”

The complaint filed by Rosen Law Firm further claims that investors suffered damages and that MoneyGram mislead investors about XRP cryptocurrency.

MoneyGram presses pause on XRP

In late February, MoneyGram had announced that it will be taking a step back from its partnership with Ripple by momentarily suspending the use of XRP on its network.

“As the payments industry evolves and matures, it’s imperative that we continue to improve our platform and provide the most effective solution to get funds from point A to point B… Through Ripple’s xRapid product, we will have the ability to instantly settle funds from US dollars to destination currencies on a 24/7 basis, which has the potential to revolutionize our operations and dramatically streamline our global liquidity management.”

It isn’t clear how the rollout process will work for xRapid, but the money transfer business, with time, could theoretically activate the Ripple Labs product at its over 370,000 agent offices, which exist in over 200 countries and reach millions of individuals.

To further entice MoneyGram to agree to this deal, Ripple has agreed to invest up to $50 million in the company, resulting in the issuance of new shares.

In a move that validated XRP bulls across the crypto community, Ripple announced Monday that it would be making one of its most notable partnerships today, joining hands with MoneyGram. Due to this ostensibly bullish piece of news, which comes amid an ongoing Bitcoin bull run, XRP has surged, outpacing its brethren in the upper echelons of the cryptocurrency market.

Ripple Drops $50 Million On Huge Partnership

Announced Monday via a post to Ripple Insights, the San Francisco-headquartered fintech firm has entered a “strategic partnership” with MoneyGram, one of the world’s largest money transfer companies.

MoneyGram stock.

MoneyGram will utilize Ripple’s xRapid product, leveraging the currency (XRP) in foreign exchange settlement as part of MoneyGram’s cross-border payment process. The partnership supports the companies’ shared goal of improving the settlement of cross-border payments by increasing efficiency and reducing cost through RippleNet.

Through this partnership, which will have an initial term of two years, Ripple will become MoneyGram’s key partner for cross-border settlement using digital assets.

Ripple agreed to purchase $30 million worth of newly created MoneyGram shares at $4.10 apiece and can purchase an additional $20 million of common stock or warrants at its discretion at a minimum of $4.10.

MoneyGram shares closed Monday at $1.45, but exploded higher after the announcement, close to $4 a share — or more than 150% higher — in after-hours trading.

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