Investors Suing MoneyGram Over Misleading Partnership With Ripple

Wednesday 03 March 2021, 11:00 AM AEST - 1 month ago

It seems like lawsuits are a never-ending topic when it comes to Ripple. Now, MoneyGram —a financial services company, is facing a lawsuit over “misleading” statements about its partnership with Ripple.

Shady Allegations over Ripple’s ODL service

Rosen Law Firm, A major U.S.-based legal firm is now suing MoneyGram on behalf of investors over shady and misleading statements about the use of ODL —On-Demand Liquidity—, a service that leverages XRP as a bridge between two currencies.

In 2019, MoneyGram announced a strategic partnership with Ripple, using its cross-border payment system. But as soon as the Securities and Exchange Commission filed a lawsuit against Ripple, MoneyGram stated that it doesn’t use Ripple’s ODL service:

MoneyGram is not dependent on the Ripple platform to accomplish its FX trading needs. As a reminder, MoneyGram does not utilize the ODL platform or RippleNet for direct transfers of consumer funds – digital or otherwise. Furthermore, MoneyGram is not a party to the SEC action. 

Rosen Law Calling in As Many Investors as they Can

According to the press release, MoneyGram failed to disclose that XRP —used by the company as part of its partnership with Ripple— was viewed as an unregistered security, instead of a cryptocurrency.

This means that if the SEC applies security laws against Ripple, MoneyGram loses market development fees, vital to their financial results. Thus, making MoneyGram statements about the use of ODL as false or misleading.

The company added that when “the true details entered the market” —when the SEC filed against Ripple— investors suffered several damages. Likewise, Rosen Law Firms is encouraging any investors with losses over $100,000 to join the class action before April 30.

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