Reportedly, Moneygram has suspended utilizing Ripple’s platform. The announcement was a result of US Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs and its officials.
Preceding year, Moneygram International earned $50.2 million for using the Ripple platform. However, this year it announced that it had suspended trading on the platform following the lawsuit against Ripple Labs and its executives.
The declaration came as part of Moneygram’s earnings report for the final quarter and entire year 2020. The company recorded total revenue of $1,217 million for the year 2020, while the money transfer revenue amounted to $1,105 million.
In the report, Moneygram detailed that in the first quarter of 2021 it did not plan to benefit from Ripple market development fees. Further clarifying its position in the Report, Moneygram added that the suspension was due to the unpredictability with respect to Ripple’s pending litigation.
Moneygram and Ripple have had an agreement since 2019, with first engaging in a pilot agreement in 2018. Under the agreement, Ripple paid Moneygram to use the XRP token.
In the company’s earnings report it was revealed that in 2020’s first quarter, Moneygram earned $12.1 million from Ripple market development fees.
As it reached the fourth quarter, its profit accumulated to $8.5. During this time Ripple market development fees were $9.2 million and the trading expenses were $0.7 million.
Moneygram’s financial statements for the years 2020 and 2019 reflect 50.2 million and $11.3 million, respectively as Ripple market development fees. These statistics were partly balanced by related-party transactions of $11.9 million and business expenses of $0.4 million.
When SEC filed a lawsuit against Ripple last year, it opted to not file a motion to dismiss the claim. SEC alleged therein that Ripple and two of its officers acquired over $1.3 billion in unregistered offerings of the digital asset. The chief executive officer, Brad Garlinghouse, and co-founder Chris Larsen were named in the complaint filed by SEC.
Allegedly, Ripple had also traded billions of XRP units in return of non-cash consideration, which included labor and market-making services. All these alleged activities were being carried out while failing to oblige to the SEC registration requirements. Moreover, the platform had not even satisfied the commission of any exemption from registration.
The claims of SEC are contingent on the argument that XRP is a security and thus should be registered with it. However, if it is proven that XRP is not a security, then SEC definitely lacks jurisdiction.
With countries lacking a legal framework for cryptocurrencies, it is becoming more difficult to ascertain what law will apply and who will regulate it. However, countries have acknowledged the issue and many have even made announcements with respect to formulation laws for the regulation of cryptocurrency.