Ripple and MoneyGram’s partnership was put to a halt last week as the money transfer giant announced that it would stop using the cryptocurrency for its cross-border transfers until the lawsuit filed by the SEC against Ripple concludes. A few days after the announcement, MoneyGram was sued for allegedly misleading its investors about XRP, which is used in its money transfer transactions for some time.
On Tuesday, the Rosen Law Firm released an announcement that it filed a class-action lawsuit against MoneyGram on behalf of investors who bought MoneyGram securities from June 17, 2019, to February 22, 2021. The law firm believes that eh investors are entitled to compensations after the money transfer giant canceled its partnership with Ripple because of its legal woes against the US SEC.
Caption: MoneyGram will no longer use Ripple XRP for its transactions
The lawsuit filed by the SEC alleges that Ripple’s sale of its native cryptocurrency XRP was an ongoing $1.3 billion sale of an unregistered security. The case is still in the pretrial discovery phase, and a conclusive result may take a long time to materialize.
The Rosen Law Firm alleges that MoneyGram made false and misleading statements that failed to disclose that the XRP, the crypto coin is used as part of its partnership with Ripple, was viewed by the US SEC as an unregistered security, therefore unlawful.
Suppose the US SEC enforces securities laws against Ripple and the XRP. In that case, MoneyGram will lose a profitable stream of market development fees critical for its financial success throughout the period as mentioned earlier. As a result, Rosen says that MoneyGram’s public statements were ultimately false and misleading at all relevant times, and when the truth came out, the investors suffered damages.
Ripple and MoneyGram’s partnership was based on the money transfer giant using XRP for its settlement services since 2019. MoneyGram earned $61.5 through these market development fees since they initiated the partnership.
