MoneyGram Slapped with Class-Action Lawsuit Over the Use of XRP
MoneyGram faces a fresh legal case for its relationship with blockchain technology firm Ripple. A fresh class-action legal case alleges that the money transfer facilitator misdirected, provided false details and concealed crucial info from investors about Ripple and cryptocurrency XRP.
The lawsuit has come months after the US financial watch dog (Securities and Exchange Commission or SEC) blamed Ripple of marketing XRP token as unregistered security.
The fresh class-action suit claims that MoneyGram will face negative impact on its finances if the judgment related to SEC lawsuit on Ripple is not favorable.
“…in the event that the SEC decided to enforce the securities laws against Ripple, MoneyGram would be likely to lose the lucrative stream of market development fees that was critical to its financial results throughout the Class Period.”
The lawsuit seeks compensation to investors who purchased shares of MoneyGram, arguing that they faced losses when it was revealed via a stock market filing that MoneyGram was “not planning for any benefit from Ripple market development fees in the first quarter” of 2021.”
“The lawsuit seeks to recover damages for MoneyGram investors under the federal securities laws.”
The legal case is centered on investors who purchased shares of MoneyGram during the period June 17th, 2019 – February 22nd, 2021.
Back in November 2019, Ripple invested $50 million in MoneyGram, which announced that it was utilizing Ripple’s XRP based payment network to process 10% of its payments between the US and Mexico.
Earlier on February 22, 2021, MoneyGram officially announced the termination of contract that allows it to use Ripple’s cross-border fund transfer platform due to uncertainty related to the latter’s legal battle with the SEC.