MoneyGram Faces Class Action Lawsuit Over False Statements Regarding XRP

Ripple partner MoneyGram is facing a lawsuit alleging the firm issued misleading statements and failed to disclose XRP’s status as an unlicensed security.

March 2, 2021 | AtoZ Markets – Rosen Law Firm has filed a class action lawsuit against money transfer service MoneyGram over claims of partnership with Ripple and the XRP token. This is stated on the website of the company.

The application was submitted on March 1 on behalf of a group of individuals who invested in MoneyGram from June 17, 2019 to February 22, 2021. According to lawyers, the company did not warn about the possible recognition of the XRP token as a security and the potential loss of a source of income in the form of commissions.

“As a result, the public statements of the respondent were inaccurate or misleading in all cases. The plaintiffs claim they suffered losses when reliable information reached the market,” the lawyers said.

Since summer 2019, MoneyGram has used On-Demand Liquidity to process cross-border payments. The service received commissions in XRP for interacting with it.

At the end of 2020, the SEC accused Ripple of selling unregistered securities in the form of tokens worth $1.3 billion. Later, the regulator clarified the responsibility of the company’s CEO Brad Garlinghouse and its co-founder Chris Larsen.

Related: Update — Preliminary Hearings in SEC vs. Ripple Case

Amid SEC claims, major platforms have dropped support for the XRP token. Among them are Coinbase and OKCoin, Galaxy Digital, Bitstamp and others. Asset management company Grayscale Investments announced the liquidation of the XRP-based investment trust, and 21Shares has excluded the Ripple token from its exchange-traded products.

Since the filing of the lawsuit, MoneyGram has taken a wait and see attitude. On February 23, 2021, the service refused to use the product based on the XRP token.

Related: MoneyGram Suspends Trading on Ripple Platform Due to SEC Lawsuit

Recall that a user of the Coinbase cryptocurrency exchange filed a lawsuit against the platform for selling XRP tokens.

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