Ripple, developers of XRP, are in another fresh crisis after their partner, MoneyGram, has decided to step back from their partnership, citing its legal battle with the Security and Exchange Commission as its reason.
“Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripple’s platform,” MoneyGram said. Ordinarily, the partnership between both firm should expire in July 2023
On Monday, the global money transfer firm said it won’t be planning to make any profit from Ripple market development fees in the first quarter of 2021, unlike in Q1 2030 when MoneyGram made $12.1 million in profit with Ripple.
The XRP developers have been paying MoneyGram for using XRP in its international settlement since the partnership began in 2019. MoneyGram has made a whopping $61.5 million in “market development fees” from Ripple.
After the SEC announced, it was going to drag Ripple to court for selling illegal securities. Several exchanges began suspending XRP, with many of Ripple’s partners pulling out of the partnership.
In a statement when the lawsuit was filed, MoneyGram announced they were going to adopt a wait-and-see approach and announced yesterday they were stepping back from the partnership.
Ripple’s response to MoneyGram’s withdrawal
In a statement issued after MoneyGram’s withdrawal, the XRP developers said that MoneyGram can only withdraw temporarily, noting that the multi-year contract they signed in 2019 is not limited to their use of ODL [on-demand liquidity solution within RippleNet that utilizes XRP].
The XRP developers said it won’t throw in the towel with its partnership with MoneyGram, noting that they look to find a path forward with MoneyGram and that both Ripple and MoneyGram are actively leveraging and exploring alternative use cases.
MoneyGram exit and its effect on XRP
Before MoneyGram dropped the juggernaut, they were backing off from their partnership, XRP price gained significant value rising by 25 percent.
XRP price on Monday jumped from $0.52 to $0.65 after massive demand from retail investors. It erased all the losses that occurred after the SEC’s lawsuit against the XRP developers in December 2020.
However, After MoneyGram’s announcement, the XRP price has continued to fall. At press time, the price of the coin has suffered a 17 percent loss, trading at $0.46. The dip, however, cannot be attributed only to MoneyGram’s move as generally, the entire crypto market has suffered a dip.
Prices of Bitcoin, Ethereum, Binance Coin, among others, have continued to plunge.