MoneyGram has just dodged a lawsuit connected to allegations of money laundering compliances.
The Dallas-Based MoneyGram is one of the largest money transfer companies in the world and has partnered with Ripple, the company behind the cryptocurrency XRP based in San Francisco, California.
In November 2018, MoneyGram agreed to pay $125 million settlement on allegations that the company violated the FTC’s 2009 Order and breached a 2012 DOJ Deferred Prosecution Agreement.
The Allegations Explained
The Delaware Court of Chancery tossed a shareholder suit alleging wire transfer service MoneyGram and its board, failed to ensure compliance with anti- money laundering requirements. MoneyGram’s failure to comply lead to federal investigations and more than $225 million in fines.
The allegations are not that MoneyGram or its directors were committing fraud, (which would be a violation of positive law that invokes bad faith) but that they were aware that others were using MoneyGram’s services to commit fraud and money-laundering, and failed in their attempts to prevent it.
MoneyGram & Ripple Partnership
MoneyGram has faced questions regarding its partnership with Ripple which is now at the center of a massive $1.3 billion lawsuit from the SEC. Recently Ripple completed its $50 million investment into MoneyGram by buying a 9.95% stake in the firm. However, in a released statement, MoneyGram stated that its agreement with Ripple remains unaffected in the wake of the lawsuit.
As a point of emphasis, MoneyGram does not utilize the ODL [On-Demand Liquidity] platform or RippleNet for direct transfers of consumer funds and are not a party to the SEC Action.
