The United States Securities and Exchange Commission has a long and complex history with the cryptocurrency industry. This has included the prosecution of fraudulent initial coin offerings during the ICO boom a few years ago, the ebb and flow of the Bitcoin ETF, and the issues surrounding the introduction of crypto-related regulation.
The last of these problems is with Ripple, which is in an ongoing legal dispute with the Securities and Exchange Commission. Now, it has been announced that a association above between MoneyGram and Ripple has been suspended as a result of the dispute.
Ripple and MoneyGram Association
Prior to this announcement, MoneyGram had been using Ripple's payment protocol. The partnership started in 2019 and would last until 2023, but is now ending prematurely as a result of the ongoing legal fight.
"Due to the uncertainty regarding its ongoing litigation with the SEC, the Company has suspended operations on the Ripple platform," the MoneyGram announcement said.
The partnership saw MoneyGram make use of RippleNet, Ripple's payment solution to complete cross-border deals. Ripple, for its part, had given MoneyGram financial incentives for making use of its solutions.
For example, in the last quarter of 2020, Ripple gave MoneyGram up to $ 8.5 million. Those payments were called "market development fees" and now that the partnership is ending, MoneyGram has stated that they do not plan to enjoy Ripple's market development fees any more.
This suspension of Ripple's partnership comes as a result of the SEC taking action against them for what they claim is an unregistered sale of a security in the form of its native token. XRP. This is not the first time the SEC has had such a problem with a cryptocurrency company.
They previously had a legal dispute with Telegram over the sale of their TON token, which Telegram insisted was a utility token and not a security. The debate over the proper classification of crypto assets by the SEC has been going on for a long time. Critics of the commission have claimed that no proper means of classification has been established and that the industry suffers as a result, as is the case with Ripple.
As the crypto industry becomes more robust and mature, a better ranking is expected to establish itself.