Just a few days after the end of the partnership with Moneygram was announced, the fintech company Ripple Labs will now sell its stake in the listed company. In a report with the US Securities and Exchange Commission, Ripple has entered into an agreement with Jefferies, in which Jefferies is expected to carry out “the orderly sale of part of its stake in Moneygram”.
Ripple and Moneygram Partnership Revamped maybe
As indicated in the filing, this agreement obliges Jefferies, a US-based diversified financial services company, to “sell up to 8,195,123 shares on behalf of Ripple.” However, this inventory outsourcing plan, which is expected to begin on March 11, will “expire on September 30, 2021 at the earliest”. At this point in time, “the maximum amount must have been sold or certain other normal events affecting the issuer must have occurred.”
Despite these steps to end the business relationship, Ripple has indicated in a statement that this partnership may be re-examined in the future. The fintech firm said:
We are both determined to reconsider our relationship in the future. We still believe in the promise of digital assets and blockchain technology to change the status quo in global payments for the benefit of billions of consumers around the world.
The Effect of the SEC Lawsuit
After the SEC announced that it was suing Ripple Labs for allegedly violating US securities law, the relationship between Moneygram and the fintech firm became difficult, forcing the former to take action. For example, Moneygram said it had “logistical challenges in using the platform, as well as legal and reputational risks” after the lawsuit was announced.
In addition, the publicly traded money transfer organization reported lost revenue as a direct result of the termination of its relationship with Ripple. On the flip side, Ripple has seen its XRP token delisted from some cryptocurrency exchanges due to the SEC lawsuit. The fintech company is also facing closer scrutiny by the SEC and another lawsuit.
Despite the growing challenges, Ripple insists that security laws have not been violated. Some early signs from the SEC / Ripple litigation are already pointing to an uphill battle for the regulator.
What does the end of the business relationship between Ripple and Moneygram mean for blockchain technology? Let us know what you think in the comments section below.
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