XRP files a class action lawsuit against MoneyGram for allegedly misrepresenting Ripple’s XRP token.
The lead plaintiff of the lawsuit was an investor in MoneyGram. Who purchased the company securities between June 17, 2019 and February 22, 2021.
He is alleging MoneyGram failed to disclose that XRP could be viewed as a security. If the court orders against Ripple, it would lose a significant stream of its market development fees.
“As a result, defendants’ public statements were materially false and/or misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages,” the lawsuit said.
MoneyGram formed a partnership with Ripple in June 2019. Receiving a $30 million investment from the San Francisco-based startup.
MoneyGram detailed that it would utilize Ripple’s xRapid product, which has since been rebranded as on-demand liquidity (ODL). While also leveraging ‘XRP in foreign exchange settlement’ as a part of its cross-border payment process.
The remittance company received $38 million in net development fees from Ripple. Which is around 15 percent of the company’s earnings.
However, MoneyGram distanced itself from Ripple following a lawsuit filed by the U.S. Securities and Exchange Commission (SEC). That alleged XRP falls under the category of unregistered security.
“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,” the company said in a statement last December.
“Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripple’s platform,” MoneyGram added.
XRP price underperforming but technicals reveal 75% breakout could be on the way
XRP has formed a downtrend in the past week, but could achieve a 75% breakout if they can conquer a key resistance level.
The resistance level formed at $0.62 is the key for a massive 75% breakout. The bullish price target in the long-term would be located at $1.10 as there is very little resistance above $0.75.
Matt Borelli is a staff writer at CoinChapter, covering the daily developments in the cryptocurrency world. He is a Bitcoin enthusiast and proud Dogecoin holder. When not reporting on the latest cryptocurrency news, Matt can be found at the nearest baseball stadium.
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