MoneyGram, a Texas-based financial services firm, announced that it has suspended trading activities on the platform of Ripple. MoneyGram mentioned that it has suspended on-demand liquidity (ODL) activities with Ripple due to regulatory uncertainty caused by the SEC’s lawsuit against Ripple labs.
According to the quarterly outlook published by MoneyGram, the company realized a net expense benefit of more than $12 million from Ripple market development fees in the first quarter of 2020.
“MoneyGram is not planning for any benefit from Ripple market development fees in the first quarter. Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripple’s platform. In the first quarter of 2020, the Company realized a net expense benefit of $12.1 million from Ripple market development fees,” the official announcement states.
Ripple and MoneyGram entered into a strategic partnership in June 2019. The San Francisco-based blockchain company also made an initial investment of $30 million in MoneyGram equity.
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Ripple immediately responded to the latest announcement by MoneyGram and mentioned that the strategic partnership between the two companies is not limited to the use of on-demand liquidity. Moreover, the company highlighted that some US-based market participants are reacting conservatively due to the uncertainty caused by the SEC’s lawsuit.
“We signed a multi-year contract in 2019 with MoneyGram, which is still in place and is not limited to their use of ODL. Together we are actively leveraging and exploring alternative use cases. We look forward to finding a path forward with MoneyGram and have confidence that there will be more regulatory clarity in the U.S. for the use of digital assets and blockchain technology at the end of this lawsuit both of which MoneyGram has commented on publicly in the past about the benefits they have witnessed firsthand for their business,” Ripple mentioned in the official announcement.
XRP is currently trading above $0.40 with a total market cap of more than $19 billion.