MoneyGram In Legal Trouble After Failing To Inform Investors Of Partnership And Cryptocurrency Legality
Money transfer company MoneyGram is accused of duping its investors of the actual relationship that the company has with partner Ripple Labs, along with the legality of the XRP token.
Filed in the United States District Court for the Central District of California, MoneyGram allegedly did not disclose its working relationship with the fintech company Ripple Labs that was hit with a class action lawsuit early this year.
Additionally, the class action contends that MoneyGram knowingly used XRP token in its operations and transactions, a cryptocurrency that was unregistered to the authorities ergo illegal. This information was also withheld from investors of MoneyGram.
When the Securities and Exchange Commission (SEC) decided to crack down on Ripple and the XRP token it used late last year, people that made an investment in MoneyGram ended up suffering financial damage too in the fallout of events.
Per the class action, Ripple was informed as early as 2012 that the XRP token could be considered as a form of an investment contract, therefore, needed scrutiny and coverage by authorities.
However, Ripple continued operating and using the cryptocurrency without registering them to the SEC for years.
In other words, Ripple has been flagrantly violating different securities laws for a prolonged period of time before the authorities decided to rein the company in.
MoneyGram, on its part, was also involved in the SEC investigation as the company was allegedly selling XRP tokens in the open market without official government oversight.
When news broke out of the investigation, the MoneyGram’s stock prices tumbled down as much as 33.2 percent – hurting investors’ and analysts’ confidence in the company.
The MoneyGram Class Action Lawsuit is seeking to create a Class that covers a nationwide scope. Individuals all over the country who invested their money in MoneyGram between June 17, 2019, to February 22, 2021, will be represented in court by the class action.
About the company
MoneyGram International, Inc., simply referred to as MoneyGram in this feature, is a multinational money transfer institution based in Texas.
Founded in 1940, it is headed by its CEO, W. Alexander Holmes that was appointed the company’s top position in 2016.
Posting a revenue of $900 million in 2019, MoneyGram has its operations center based in Minnesota, which heads and controls several regional and local branches all around the globe.
Editor’s Note on MoneyGram XRP Class Action Lawsuit:
This news feature aims to inform you of the latest class suit MoneyGram is facing because of its inability to properly disclose its business relations with another company and its illegal use of an unregulated cryptocurrency.
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