Ripple has announced that both Ripple and MoneyGram have mutually decided to end the partnership agreement reached back in 2019, just months after MoneyGram distanced itself from Ripple amid a US Security and Exchanges Commission probe on the company.
In its statement, Ripple stated that the company was satisfied with the results and impact of the partnership during the last years as billions of dollars were processed using its RippleNet and On-Demand Liquidity services.
The statement finished by opening the doors to both companies working together in the future to, “change the status quo in global payments”.
Ripple is Being Held Back by US Regulators
Brad Garlinghouse, Ripple CEO, referred to the decision by tweeting that a lack of a regulatory framework for crypto played a role in the break by muddying the waters both for business and consumers.
Garlinghouse has been vocal in his opposition to the SEC stance on Ripple and the ongoing actions against the company, which has caused its future to be all but certain as to how it will operate in the future.
While MoneyGram had already announced that it would no longer be using Ripple’s crypto-based liquidity solution back on February 22 when it published its fourth-quarter report for 2020.
Companies Continue to Distance Themselves from Ripple
In the report, MoneyGram stated it was not planning to use Ripple’s services in the first quarter of 2021 “due to the uncertainty concerning their ongoing litigation with the SEC.”
This decision was reached despite the company reporting a net expense benefit of $12.1 million from using Ripple during the first quarter of 2020.
Other companies like Binance and Coinbase delisted XRP from their exchanges earlier this year for users in the United States, with both companies having concerns about the legal status of the cryptocurrency in the US as the SEC case progresses.
Ripple collaborators like Intermex also announced they would not be using the platform’s services for the time being, while investment funds like Bitwise Asset and Grayscale dissolved their XRP trust, liquidating their XRP holdings.
Despite these moves by different companies and platforms, XRP’s value has not suffered from major drops in the long term but has lost its spot as one of the 5 top cryptocurrencies by market capitalization at a time when the crypto market experienced a massive bull run.
The SEC’s Case Against Ripple
The American Securities and Exchange Commission charged Ripple and two of its executives, Christian Larsen and Bradley Garlinghouse, for raising over $1.3 billion through XRP, an unregistered digital securities offering.
According to the amended complaint, Larsen and Garlinhouse would have, “knowingly or recklessly provided substantial assistance to Ripple’s violations of Sections5(a) and 5(c) of the Securities Act”.
Based on this, Larsen’s lawyers file a motion to dismiss the case back on March 4th due to the SEC’s complaint failing to prove that Larsen was aware of any issues with the way XRP was being used, as according to the Justice Department XRP was considered a virtual currency instead of a security.
A Shady Move by SEC
Ripple’s lawyers also stated that SEC failed to provide “fair notice” to any of the defendants about the violations that XRP transactions be hit with.
Former SEC chair, Mary Jo White, referred to the agency’s lawsuit earlier this month by saying that, “there’s no way to sugarcoat it. They’re dead wrong legally and factually”.
She also claimed that the filing of the lawsuit seemed suspicious as it was too close to a change in administration.
The legal battle between Ripple, its executives, and the SEC has been a matter of importance in the crypto ecosystem as its results are sure to have a considerable impact on how cryptocurrency regulation could be approached by the world’s biggest economy.