Moneygram ripple sec ripplemcsweeney

moneygram ripple sec ripplemcsweeney

Monday that it “is not planning for any benefit from Ripple market development fees in the first quarter” of 2021, a huge contrast from when MoneyGram generated $12.1 million in market development fees in last year’s Q1.

It further explained:

“Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripple’s platform.”

All payment incentives from Ripple to MoneyGram for using XRP are listed as “market development fees,” which is essentially monetary compensation for providing liquidity to Ripple’s On-Demand Liquidity Network.

In 2018, MoneyGram figured among one of the hugest firms to publicly announce that it was piloting Ripple’s XRP cryptocurrency in its remittance services.

However, the use of XRP by MoneyGram has been temporarily paused given the ongoing legal battle between Ripple Labs and the U.S.

The platform utilizes the XRP cryptocurrency. Its use by Moneygram is subsidized by Ripple.

In its earnings release Monday, Moneygram revealed that “In the first quarter of 2020, the company realized a net expense benefit of $12.1 million from Ripple market development fees.” In the fourth quarter, it generated “$8.5 million net benefit from Ripple market development fees of $9.2 million, partially offset by related transaction and trading expenses of $0.7 million.”

Meanwhile, its financial statements for the year 2020 and 2019 include Ripple market development fees of $50.2 million and $11.3 million, respectively.

Ripple substantially “higher” than currently used services.

Ripple’s great SEC bust

Ripple was sued by the US Securities and Exchange Commission earlier this week on charges of having sold $1.3 billion worth of unlicensed, unregistered securities in the form of XRP tokens.

The firm allegedly even paid exchanges to pump (and support) token prices, provide high volumes to trading pairs to make them look attractive, and dole out premiums for listings on top US exchanges.

market sales and institutional sales by Ripple execs through 2019 …

— Palley (@stephendpalley) December 22, 2020

In addition, founders Brad Garlinghouse and Chris Larsen are named in the lawsuit for cashing out $700 million via the illegal sale.

XRP prices have crashed nearly 50% since Monday when the lawsuit was leaked to the public.

MoneyGram has suspended its relationship with Ripple Labs, citing the legal uncertainty surrounding the company. In its latest earnings report, the Dallas, Texas-based firm said it would no longer be using Ripple’s XRP remittance solution until the payments firm sorts out its legal issues with the U.S.
Securities and Exchange Commission (SEC).

MoneyGram partnered with Ripple in January 2018, becoming one of the first payments service providers to pilot Ripple’s xRapid solution. xRapid allows companies to transfer funds across borders using XRP without the need for pre-funded nostro accounts.

Three years later, MoneyGram has suspended the service. In its 2020 financial results report, the company stated:

“In addition, the Company is not planning for any benefit from Ripple market development fees in the first quarter.

Ripple Labs and its lead executives in violation of federal securities laws.

SEC lawsuit makes XRP unpopular with exchanges

Since the SEC’s lawsuit against Ripple, many cryptocurrency exchanges have also moved to delist or halt XRP trading on their platforms, to avoid legal complications. Even those that have not done so have warned that they may eventually be forced to follow suit, as liquidity on partner exchanges for XRP drops and platforms where XRP can be traded becomes limited.

The move from many crypto platforms to delist XRP has not discouraged the firm, however, as it previously revealed that more than 90% of RippleNet customers were situated outside of the US.

Currently, XRP has managed to break the $0.50 level once again, despite plunging drastically after the SEC announced it was suing Ripple.

International announced Monday that it has suspended trading on Ripple’s platform. The announcement came as part of the company’s earnings report for the fourth quarter and full year 2020.
For the year 2020, Moneygram recorded total revenue of $1,217 million; its money transfer revenue was $1,105 million.

As part of its first quarter 2021 outlook detailed in the report, Moneygram wrote that it “is not planning for any benefit from Ripple market development fees in the first quarter,” adding:

Due to the uncertainty concerning their ongoing litigation with the SEC, the company has suspended trading on Ripple’s platform.

How Much Ripple Is Paying Moneygram

Moneygram has had a commercial agreement with Ripple since June 2019 to “use Ripple’s foreign exchange (FX) blockchain trading platform (ODL) for the purchase or sale of four currencies,” the company explained.

The punches keep on coming for Ripple, days after the SEC launched a defining lawsuit against the company and its founders for having sold “unlicensed” securities in the US,

MoneyGram distances from Ripple

International payments processor MoneyGram distanced itself from Ripple yesterday as various charges were levied against the company and its founders.

In a statement, the Dallas-based business said it never used Ripple’s on-demand liquidity service, XRP tokens, or the RippleNet in any form, despite Ripple (and its supporters) popularizing that partnership since 2019.

“MoneyGram does not utilize the ODL platform or RippleNet for direct transfers of consumer funds – digital or otherwise.

The two companies had signed a partnership for cross-border payments and foreign exchange settlements with digital assets.

In November 2019, with a $50 million investment, Ripple had a 10% stake in the company. However, in December 2020, Ripple had roughly sold $15 million MoneyGram stock.

After which legal action was to be taken by the U.S. Securities and Exchange Commission against Ripple and its CEO- Brad Garlinghouse, and co-founder- Christian Larsen, for attempting to distance itself from the firm.

A few days after the announcement, MoneyGram clarified that it had never utilized Ripple’s On-Demand Liquidity and the RippleNet services for direct consumer funds transfers.

Based on the SEC’s lawsuit against Ripple, many crypto exchanges, including Moneygram, have suspended the buying and selling of the XRP token.

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.

MoneyGram suspending usage of the company’s payment platform.

MoneyGram previously cited Ripple’s ongoing legal battle with the SEC in its decision to distance itself from XRP tech.

Initially, media reports framed the deal as Ripple buying a $30-50 million stake in MoneyGram, after which MoneyGram would use XRP tech to process cross-border payments.

However, it later became clear Ripple was simply paying MoneyGram millions of dollars in XRP “incentives” to use its xRapid platform (later rebranded to On-Demand Liquidity (ODL)).

Perhaps the single most damning details from the Ripple complaint:

The main financial company using XRP, a money transmitter, told Ripple it was much more expensive than alternatives and only agreed to use it because Ripple was paying it to do so.

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