After Ripple Laboratories, the payment giant MoneyGram is the next to be caught at the end of the legal entanglement, with a class action suit lodged on 1 March alleging that MoneyGram distorted its association with Ripple and, by default, XRP.
The case in question, brought on behalf of the purchasers of the shares of MoneyGram International, Inc. between 17 June 2019 and 22 February 2021, alleges that the payment company has consistently made “false and/or misleading claims” about its partnership with the blockchain firm. According to the same, MoneyGram has not properly disclosed that the SEC sees XRP, a cryptocurrency used by MoneyGram as part of its partnership with Ripple, as an unregistered protection.
Contending that the victims sustained losses, the case further claims that MoneyGram did not report the damages,
“…. in the event that the SEC decided to enforce the securities laws against Ripple, MoneyGram would be likely to lose the lucrative stream of market development fees that was critical to its financial results throughout the Class Period.”
The class action lawsuit brought by Rosen Law Firm comes at an interesting moment, particularly because, over the last few months, MoneyGram has done its utmost to distinguish itself from Ripple, XRP and the legal problems they face.
Remember this – back when the relationship between Ripple and MoneyGram was first revealed, the latter said that it would use “Ripple’s xRapid offering to exploit XRP in foreign exchange settlement as part of the cross-border payment phase of MoneyGram.”
Fast forwards to December 2020, though, and MoneyGram was swift to claim that it did not rely on Ripple for its FX trading needs. Two months later, it went as far as suspending its relationship with Ripple, noting the confusion surrounding the continued conflict with the SEC.
At this time, it is still uncertain what the new litigation entails for Ripple and the XRP ecosystem.
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