Global remittance giant MoneyGram has recently avoided a lawsuit that alleges that the company was involved in money laundering. The company is one of the major backers of blockchain payments giant Ripple, who is also amidst a lawsuit with the U.S. Securities and Exchange Commission (SEC).
Back in 2018, MoneyGram had agreed to pay a sum of $125 million to escape prosecution on the grounds that the platform’s top executives had failed to prevent money laundering on the platform.
As of now, the lawsuit has been dismissed by the Delaware Court of Chancery, and according to Vice Chancellor Sam Glasscock III’s memorandum opinion, “bad oversight is not bad-faith oversight.”
The opinion further described that the MoneyGram executives in question as “wistless,” and what they did as “feckless,” representing a “lack of vigor.” According to Glasscock, they were they were this bad at their jobs, and this is what saved them from this lawsuit.
MoneyGram is one of the biggest money transfer companies in the world. Back in 2019, Ripple made a $50 million investment in the company, giving it a 9.95% stake in the firm. Over the past weeks, the company has also been questioned regarding its relationship with the blockchain company because of the $1.3 billion lawsuit from the SEC.
Ripple’s XRP is the fourth-largest cryptocurrency by market capitalization and the price of the token has crashed significantly after news of the lawsuit surfaced and several exchanges started delisting the popular altcoin.
MoneyGram remains a Ripple Partner
Last month, MoneyGram released a statement announcing that its partnership with Ripple remains intact despite the lawsuit.
“The Company has not currently been notified or been made aware of any negative impact to its commercial agreement with Ripple but will continue to monitor for any potential impact as developments in the lawsuit evolve,” the statement read.
Ripple has been leveraging XRP to facilitate money transfers for banks and financial intuitions like MoneyGram. The statement continued:
“As a reminder, MoneyGram does not utilize the ODL [On-Demand Liquidity] platform or RippleNet for direct transfers of consumer funds – digital or otherwise. Furthermore, MoneyGram is not a party to the SEC action.”
For now, it seems that the MoneyGram-Ripple partnership remains intact, but a spokesperson for the company has noted “MoneyGram will continue to monitor the situation as it evolves.”
However not all major institutions have kept their ties with Ripple and XRP. As previously reported by The Daily Chain, Grayscale Investments, the world’s largest cryptocurrency asset manager was the latest to liquidate all its XRP holdings as a response to the SEC lawsuit.