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MoneyGram beaten with ripple lawsuit, XRP partnership

Source: Adobe / piter2121

Money transfer company MoneyGram is facing a class action lawsuit alleging that the company made false and / or misleading statements about its partnership with American blockchain company Ripple and the legal status of the XRP token.

According to a press release from the law firm Rosen, the lawsuit was filed on behalf of buyers of MoneyGram’s securities between June 17, 2019 and February 22, 2021.

According to the lawsuit, during this period the defendants made false and / or misleading statements and / or failed to disclose that:

  1. “XRP, the cryptocurrency MoneyGram used as part of its Ripple partnership, was viewed by the US Securities and Exchange Commission as an unregistered and therefore unlawful security.
  2. In the event the SEC decides to enforce securities laws against Ripple, MoneyGram will likely lose the lucrative stream of market development fees that was critical to financial results throughout the class period.
  3. As a result, the defendants’ public statements were materially false and / or misleading at all relevant times. When the real details hit the market, the lawsuit alleges that investors have suffered damage. “

The law firm claims that those who “purchased MoneyGram securities during the class period may be eligible for compensation without paying any out-of-pocket expenses or expense through a contingent fee arrangement.”

A lead plaintiff has yet to be selected.

MoneyGram and Ripple became partners after the latter made an initial $ 30 million investment in MoneyGram shares in June 2019. However, Ripple has been in a long battle with the SEC over XRP as regulators claim XRP is an unregistered security that Ripple disputes.

MoneyGram recently claimed that its support for Ripple remained, but announced it would suspend receiving “market development fees”. Alex Holmes, the CEO of MoneyGram, said at the time that they “definitely support Ripple’s efforts, but at the same time we need to do what is right for the organization.”

In 2020, MoneyGram received from Ripple net market development fees of $ 38 million in 2020, which is approximately 15% of the company’s adjusted earnings before interest, taxes, depreciation and amortization. After the lawsuit against Ripple, the company also faced logistical challenges in using the platform as well as legal and reputational risks.

XRP is trading at USD 0.44 (at 14:01 UTC). It rose 2.7% in one day and 5.8% in a week.
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Learn more:
– MoneyGram says it still supports Ripple despite the partnership hiatus
– Review of Ripple’s claim that “many G20 governments” refer to XRP as “currency”
– MoneyGram’s success depends on Ripple’s success – CEO
– What kind of crackdown by the SEC? The Japanese giant SBI is now offering XRP loans
– XRP Pumpers hope for more action; Cardanos Hoskinson warns of pumps and dumps
– XRP falls despite positive reports, there is a lawsuit over USD 50 loss

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