The shares of MoneyGram may bounce back to better days as the legal team representing Ripple reportedly had a great showing in the first court hearing.
The shares of American money transfer giant Moneygram International Inc (NASDAQ: MGI) are coasting down the drains as the company has placed its business relationship with embattled blockchain payments outfit Ripple Labs Inc on hold. As reported by Coindesk, the move by the former firm was attributed to the latter’s ongoing legal battle involving the United States Security and Exchange Commission (SEC).
In a statement issued back in December 2020, MoneyGram said it will be monitoring the Ripple-SEC situation as it has not been officially informed of the harmful impact of the lawsuit on its business relationships.
“The Company has not currently been notified or been made aware of any negative impact to its commercial agreement with Ripple but will continue to monitor for any potential impact as developments in the lawsuit evolve,” MoneyGram said at the time, reiterating that it “has had a commercial agreement with Ripple since June 2019; this agreement represents the use of Ripple’s foreign exchange (FX) blockchain trading platform (ODL) for the purchase or sale of four currencies.”
The recent development features MGI halting its Ripple partnership, until there is at least, a regulatory clarity with the SEC over the status of XRP as investment security or not. The Dallas-based money transfer company revealed on Monday it “is not planning for any benefit from Ripple market development fees in the first quarter” of 2021. The firm accrued as much as $12.1 million in related revenue from the blockchain company in the same period in 2020.
The news has turned out bearish for both MoneyGram and XRP as the shares of the former closed Monday’s session down by 22.91% to $8.38, and XRP is in a bear market with over 23.78% loss to $0.4565 in the past 24 hours. MGI has been stretched on the losing streak shown by a further drop of 2.74% in the after-hours trading.
Hopes of MoneyGram Shares Rebounding amid Ripple’s Compelling Court Case
The shares of MoneyGram may bounce back to better days as the legal team representing Ripple reportedly had a great showing in the first court hearing held yesterday, February 22nd. As revealed, the blockchain firm threw a bombshell argument against the SEC, recalling a move back in 2019 when a crypto exchange approached the regulator to demand clarity on the status of XRP, prior to listing the coin on its platform.
The SEC was unable to provide this clarity as demanded, forcing the exchange to conduct its own research, succeeded by the listing of the cryptocurrency. Ripple argues to note what has changed from 2019 to date which inspired the commission’s drive to prosecute the firm.
Ripple also revealed other nation’s regulators have ruled that XRP is a cryptocurrency further highlighting the confusion the SEC is plunging the firm and its ecosystem into.
As the legal battle proceeds in the coming days, MGI shares may rebound if the Ripple argument works in its favor against the Gary Gensler-led commission.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.