Blockchain firm Ripple and money transfer company MoneyGram (Nasdaq: MGI) have made the decision to end their current partnership agreement.
MoneyGram took a step back from the partnership last month citing the regulatory uncertainty around Ripple and its associated token XRP.
Winding down the partnership
In an announcement, the blockchain firm said that it is proud of the work the two accomplished together in a short amount of time, “as well as the impact we were able to achieve in bringing the first-of-its-kind product to market.”
Ripple CEO Brad Garlinghouse confirmed that the two parted ways.
Today, we’re announcing that Ripple and MGI have together decided to wind down our current partnership agreement, and are both committed to revisiting it in the future. See our full statement: 1/2 https://t.co/KGOzPWuThR
— Brad Garlinghouse (@bgarlinghouse) March 8, 2021
Ripple and MoneyGram engaged in a pilot program in 2018. Since 2019, Ripple has been paying MoneyGram to use its affiliated token XRP in international settlement.
To date, MoneyGram received $61.5 million in market development fees from Ripple.
However, the money transfer company said in February that it was not looking forward to benefiting from Ripple market development fees in Q1 this year. In the same quarter last year, MoneyGram netted $12.1 million in fees.
In 2019 we signed a *multi-year* deal with MGI, still fully in place. They’ve temporarily suspended using ODL — for obvious reasons – regulatory uncertainty at this time. As a public company headquartered in the US, they have to err on the conservative side. 1/3
— Asheesh Birla (@ashgoblue) February 22, 2021
Despite the end of the partnership, there is a possibility of revisiting it in the future, at least from Ripple’s point of view.
“We are both committed to revisiting our relationship in the future. We still believe in the promise of digital assets and blockchain technology to change the status quo in global payments for the benefit of billions of consumers around the world.”
Ripple court case
Ripple is currently involved in a court case with the U.S. Securities and Exchange Commission (SEC) after the agency charged Ripple and its two executives with selling unregistered securities.
Ripple is fighting these charges, arguing that XRP tokens are not securities. Garlinghouse has not held back on his thoughts on the matter and in a recent letter to the courts, he said “this case represents regulatory overreach, plain and simple.”
The court case has had a negative impact on XRP.
Effects of the court case
The legal battle has come at a cost to both Ripple and XRP. The firm has lost a partnership while the XRP token has been delisted on several trading platforms.
On the other hand, some of Ripple’s partners such as Japanese financial giant SBI Holdings have pledged to continue supporting the company.