MoneyGram Takes Wait-and-See Approach as SEC Sues Partner Ripple

MoneyGram has yet to see any “negative impact” on its longstanding business arrangement with Ripple from the U.S. Securities and Exchange Commission (SEC)’s lawsuit against the latter company. 

“MoneyGram will continue to monitor the situation as it evolves,” a company spokesperson told CoinDesk in an emailed statement. “MoneyGram has continued to utilize its other traditional FX trading counterparties throughout the term of the agreement with Ripple.”

The SEC alleged in a case filed Tuesday that Ripple used XRP, the cryptocurrency two of its founders created, to conduct an ongoing, $1.3 billion sale of unregistered securities.

Ripple owns more than 4% of MoneyGram and paid MoneyGram $9.3 million in the third quarter of this year for providing liquidity for Ripple’s XRP-based cross-border settlement network. All in, Ripple has given MoneyGram $52 million for using Ripple’s on-demand liquidity (ODL) service. 

On-demand liquidity through Ripple’s xRapid cross-border payment service allows companies to transfer funds from one currency to XRP and from XRP to another currency. This allows enterprises to avoid opening a bank account in countries they want to send payments to, letting them avoid holding funds there for cross-border transactions.

Read more: An SEC Victory in Ripple Case Would Render XRP ‘Untradeable,’ Market Pros Say

MoneyGram, currently the second-largest money transfer provider in the world behind Western Union.